Taiyuan is the capital of Shanxi, China. Taiyuan is the political, economic, cultural and international exchange center of Shanxi Province. It is a…Taiyuan is the capital of Shanxi, China. Taiyuan is the political, economic, cultural and international exchange center of Shanxi Province. It is an industrial base focusing on energy and heavy chemicals. Throughout its long history, Taiyuan was the capital or provisional capital of many dynasties in China, hence the name Lóngchéng.