The air is filled with the aromatic mix of soy, rice wine, sesame, spices, frying oil, grilling meat and the high-pitched shouts of hawkers. Clouds of smoke waft above the dozens of small stalls that make up Taipei's Ningxia night market, all brightly lit, sitting under coloured signs, beckoning customers to tables loaded with glossy, roasted duck heads and necks, intestines and hearts of every conceivable nature, piping hot bowls of noodles and freshly made dumplings.

Stepping deeper into the elbow-jostling crowd, my nose leads my eyes towards frying chicken (often lushly marinated in soya milk then spiced and floured), coal-roasted squid, poached quail eggs, pig's blood rice cake, even frog spawn and skewered and grilled crickets. I try gooey omelette of sweet potato studded with small, fat salty oysters and covered in sweet, vinegary, ketchupy sauce. And gelatinous mochi rice balls, topped with peanut and sesame shavings. Above it all is the unmistakeable stench of stinky tofu. This Taiwanese staple begins as regular tofu which is fermented in basins of brine until it reaches a malodorous ripeness – it is then deep fried to render the outside crispy. I muster one biteful and the taste is, well, fine, but the putrid smell lingers on your clothes and in your hair and, for me, hangs on in the memory for just a little too long.

Taiwan probably has the best night market scene in the world and some of the most exciting street food in Asia. With little space at home to cook, the Taiwanese prefer to head out almost every night to the heaving markets for the cheap snacks – or xiaochi – that are found across the island – on corners, in clusters of food-devoted streets or at one of over 100 night markets. Those with no language skills simply stand in front of the stall, point to what they want and use their digits to say how many. Stallholders then write the price down, with dishes generally costing between 60p and £1.20.

A cook prepares for the evening rush at one of Taipei’s ever-popular street food markets. Photograph: Lap-Fai Lee

"A melting pot of cuisines" is an oft-used cliche – but the food of Taiwan really is. Inhabited first by aborigines, the island sitting between the South and East China Seas was settled by Fujianese then Hakka peoplefrom mainland China before being "discovered" by the Portuguese in the 16th century, colonised by the Dutch in the 17th century, followed by the Spanish and then, between 1895 and 1945, the Japanese. At the end of the Chinese civil war, Chiang Kai-shek and the defeated Kuomintang army retreated to Taiwan with more than two million people, including many of the mainland's best chefs.

I am being guided through Taiwan, its culinary history and the wondrous world of xiaochi by the team of street food vendors who last year won the Young British Foodie award and two British Street Food awards for Bao, a London-based bar and market stall championing Taiwanese dishes and ingredients. Er Chen Chang was born in Taiwan but came to boarding school in the UK in 2005 and stayed. She met Shing Tat Chung at Slade School of Fine Art and, together with Shing's sister Wai-Ting (Ting for short), decided to make something of their gastronomic passion.

"When we travelled around Taiwan, we loved the baos (buns) – they had this combination of flavours that just blew us away," says Shing. "It was the first time we'd tried peanut shavings, then there was the soft bun, the salty pork, the sour pickles. There was a great challenge for us to see how far we could go to make that better."

Demand for Bao's baos means the threesome is now looking for premises in central London. They're leading a vanguard of what seems to be a burgeoning love for buns in the UK, a new craving that was gestated at the New York restaurant (now group) Momofuku, whose founding chef David Chang has been dubbed "the king of pork buns".

For this trip to Taiwan, the Bao group has gathered a bunch of like-minded food lovers via the crowd-sourcing travel site Open Trips. But it is a foray that similarly greedy adventurers can replicate with the help of Er Chen's guide to the foodie nooks and crannies of her home city (see below).

"You can come and do this yourself as Taipei is an easy city to negotiate, the public transport system, called the MRT, is great and cheap."

A tea ceremony. Photograph: Lap-Fai Lee

We travel to Ningxia by taxi (dirt cheap if there's a few of you) and the Bao group heads straight for the deep-fried taro stall with its biscuity smell. The queue snakes along the pavement and there is a 20-minute wait for crispy balls of tuber. "I love that people do one thing really well, adapting and perfecting their recipes. If there's a queue, it means they make the best. If you see a queue for food in Taiwan, get in it," Er Chen advises.

So we do, waiting half an hour for a spring onion omelette inside a sweet-glazed hot sesame flatbread at Fu Hang Dou Jiang at Huashan Market (Zhongxiào East Road, Zhongzheng), a famous breakfast joint which shuts at 10am, where Er Chen would come with her family to eat curdled milk with breadsticks; and at Din Tai Fung Dumpling House, Taiwan's most famous restaurant, where we debate how to eat our xiaolongbao – soup dumplings (with roots in Shanghai) encased in translucent skin and holding a puddle of broth and a ball of pork.

At Nanmen indoor produce market, stallholders proffer sour cherries, peanuts that are almost black when you pop them from the shell, and samples of Jinhua-style ham. Tables are piled with the remarkable fruit of this island – pineapples, mangoes, guavas. In the basement, people are hand-rolling dumplings, smiling. Hanging on one stall is the famous black chicken, known as a Silkie, with blue-ish black flesh and bones and a deep, gamey flavour.

"I remember when I was young my grandmother would make 'healthy soup' from black chicken and said it would make me tall. It definitely worked," laughs Er Chen. "I am much taller than my parents."

Dishes from Audrey's cooking class. Photograph: Lap-Fai Lee

We buy ingredients for a cookery class at Teacher Yong's Cookery School where Er Chen, Ting and Shing reveal some (but not all) of the secrets of making their bun of unfathomable fluffiness (you can book something similar at kitchenivy.com) and when we exit down seven flights of stairs, we are thrust into the busy Ximending area which is packed with young people. Beyond its fashion shops, little sides alleys with stalls selling cheap tat and gay bars (where you can drink outside) is a city that's unfairly under-rated as a tourist destination.

We visit Buddhist and Taoist temples, watch the highly choreographed changing of the guard at the elaborately grand Chiang Kai-Shek Memorial Hall, take the fastest lift in the world to the top of the Taipei 101 tower (at 508 metres it was once the world's tallest building), watch early morning tai chi in the park and ponder the world's greatest collection of Chinese artefacts at the National Palace Museum. The city's low-rise architecture makes it seem less dense than many Asian cities and, in recent years, it has cleaned up its smoggy act and cleared green spaces. Taipei is working on showing visitors that what it lacks in architecture, it makes up for with relaxed and friendly people, a rich natural larder and some of the best Chinese food in the world.

From the capital, we take the high-speed train 180 miles south to Tainan, the oldest city in Taiwan, and certainly more beautiful than the capital. We watch the landscape change, passing trees in blossom and beginning to fruit, until we reach the station on the outskirts of the city. Our first stop is a pavement cafe where we have breakfast bowls of turkey rice for less than a pound and "little sausage wrapped in big sausage" at the country's biggest night market, Hua Yuan. There's more space here, enough to sit on pop-up tables and chairs, which means we can really savour our next find – pancakes filled with milky ice-cream, peanut shavings and coriander. They are divine. On the train back to Taipei, the Bao group concedes that stinky tofu won't be making it on to the list of new dishes they want to add to their London menu. But that ice-cream pancake? Shing smiles: "That was just amazing. We'll definitely be trying our own version of that when we get back."

Taipei food tips by Er Chen Chang of Bao

Hsu Ren Ping's noodle factory. Photograph: Lap-fai Lee

Pull your own noodles
Take a taxi into the mountains to Hsu Ren Ping's noodle factory where you see noodles being pulled by hand then hung in the wind like stringy hammocks – and then try to do it yourself. Book in advance. 
• No 3 Si Fen Zi, Wu Tu Village, Shi-Ding District

Visit Yongkang Street
Filled with street stalls, cafes and restaurants, this is a funky place. There's the small but famous cong zhua bing stall selling circular flaky pancakes filled with egg. Across the narrow street (at number 15) is the home of the shaved ice mountain, a sweet frozen granita pile, topped with mango and condensed milk, various beans and even taro.

Eat fresh seafood
Take your pick at the Addiction Aquatic Development market and have the chefs cook it for you on the spot. You can also try sushi or hotpot.
• addiction.com.tw

Sip bubble milk tea 
This mix of brewed tea, milk and balls of tapioca, known as boba, is everywhere. Taiwanese love springy or bouncy food, something with bite or texture – that's why they adore bubble tea.

Dine on fancy Taiwanese food 
In vintage surroundings, Si-Zhi-Tang offers daily changing dishes, including pig's trotters cooked in aged hua diao (a type of shao xia wine) with soy beans. Quite pricey at around £25pp but a good example of high-end local food with a twist. 
• No 18, Sec 3, Jinan Road, +886 2 8771 9191

Tuck into beef noodles
Try Lin Dong Fang beef noodle shop – the noodles here have bite and the broth is slightly mediciney, made all the better by sticking a spoon in one of the jars of unctuous lard and chilli mix on the tables and melting it into the soup.
• Badé Road 274

Try pineapple cake
Pineapple cake, or fengli su, is a small cube of cake filled with candied pineapple and a mix of winter melon. The best place to get it is at Chia Te.
• chiate88.com

Get a taste of history 
The menu at James Kitchen recalls Taiwan under Japanese rule, with traditional, old-fashioned dishes using local ingredients and methods the owner, James Tseng, learned from his mother, such as oyster and deep-fried dough stick in a seafood broth. £10-12pp for a selection of around six dishes. 
• 65 Yongkang Street, Da'an District, +886 2 2343 2275

Advice for tourists

Leaflets and detailed maps about Taiwan's street markets and food can be found at tourist offices and at Taipei airport. Dedicated food tours can be booked via Golden Foundation Tours