Yuchi Canal is situated in the Guandu Plain of Beitou District, Taipei City. The Guandu Plain is a vast area in Taipei that produces two rice crops annually. Yuchi Canal is responsible for channeling water from the Datun Mountain range to irrigate the paddy fields in the Guandu Plain before directing it downstream to Guandu Nature Park.

The Guandu Plain agricultural area also serves multiple purposes for Taipei City, including supporting the ecosystem, preventing floods, reducing temperature, and providing opportunities for food and agriculture education.