Instead of building a 4,500-tonne missile frigate, Taiwan's navy proposes two 2,000-tonne frigates.
Taiwan's navy chief of staff says sending major ships to monitor Chinese ships has high costs.
"This has significantly increased not only the operational and fuel costs of our ships but also the manpower," Chiang said.
He said building the lighter frigates for the shadowing missions would be more cost effective.
Beijing considers Taiwan part of its territory that must be brought back under its control, by force if necessary.