Taiwan is a state in East Asia. Originally based in mainland China, the Republic of China now governs the island of Taiwan (formerly known as Formosa), which forms over 99% of its current territory, as well as Penghu, Kinmen, Matsu, and other minor islands. neighbouring states include the People's Republic of China to the west, Japan to the east and northeast, and the Philippines to the south. Taipei is the capital city and economic and cultural centre of the country, and New Taipei is the most populous city.