"A recent unexpected episode in her performance has caused various interpretations... We have decided to suspend the concert out of concerns for performance quality as well as the audiences' welfare and safety," her agent Tsai Yu-ching said in a statement.
Taiwanese media said speculation was rife that Chang could be blacklisted in China after she displayed Taiwan's flag on stage during a concert at a British university earlier this month.
China still claims sovereignty over Taiwan even though the two entities have been governed separately since 1949. Beijing has threatened to invade should Taipei formally declare independence.
The flag incident sparked criticism from Chinese netizens, with some labelling her a "pro-Taiwan independence singer", as well as a war of words on the Internet between Taiwanese and Chinese.
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"We don't need too much money but we have to uphold our dignity," read a message on the online forum of the Taipei-based United Daily News.
"It's good she cancels the concert, she doesn't have to be a Joan of Arc in China, these Chinese mobs dare to burn anything," wrote another.
These criticised Chang, with one reading: "Those who dare to play the Taiwanese independence games should be prepared to get beat up."
Chang was not the first Taiwanese entertainer to find herself in hot water over the delicate relations with the mainland.
Pop diva A-Mei was blacklisted by China for several years after she sang Taiwan's national anthem at the 2000 inauguration of then-president Chen Shui-bian, known for his stance of promoting the island's independence.
Tension with China mounted under Chen's eight-year rule which ended in 2008 but has eased markedly since his successor Ma Ying-jeou took office on a Beijing-friendly platform.