The dam was started in December 1978 and finished in June 1984.[2] The cost was NT$1.83 billion.
The Ronghua Dam is within the catchment area of the Shihmen Reservoir, 27 kilometers upstream of the Shihmen Dam in the Dahan River gorge.[2] The dam's main function is to prevent sand from moving downstream and building up as silt in the Shimen Reservoir. It also serves as a diversion point for sending water to a 40,000 kilowatt hydroelectric plant located 6 kilometres (3.7 mi) downstream.
As of 2012, the dam has no effective storage capacity, as almost its entire reservoir has been filled by sediment.