UPDATE 1-Taiwan rebukes China for tourism ban amid rising tension

(Adds Taiwan president's comment, details; paragraphs 3,4,7,8)

TAIPEI, Aug 1 (Reuters) - Taiwan's president on Thursday rebuked China over a ban on individual permits for its visitors to the self-ruled island, saying the move aimed to manipulate coming presidential elections amid heightened tension with the giant neighbour.

In a blow for Taiwan's tourism industry, which has recently seen a spurt in mainland visitors, China has said it will stop issuing the permits from Thursday, citing the state of ties with what it considers a wayward province.

"Using tourists as political tools would only create antipathy in Taiwanese people," President Tsai Ing-wen told reporters in the presidential palace in Taipei, criticising what she called a major strategic mistake.

"Tourism shouldn't be politicized," she said, adding that past experience had shown China manipulated politics by clamping down on tourist numbers ahead of elections.

Taiwan is set to hold presidential election in January, at a time of precarious relations with China, which has never ruled out the use of force to bring the island under its control, if necessary.

Tsai faces an uphill battle in the race, amid criticism over her party's reform agenda as Beijing, which suspects her of pushing for the island's formal independence, ratchets up diplomatic and military pressure.

China has triggered regional tension with military drills this week near Taiwan, Tsai said, calling them an intimidation move ahead of the election.

"The Chinese military threat is targeting all Taiwanese and impacting peace, stability and safety in the region," she said.

The exercises came days after Beijing reiterated it was ready to fight if there was any move towards independence for Taiwan.

Taiwan is among a growing number of flashpoints in U.S.-China ties, from a trade war and U.S. sanctions to China's increasingly muscular military role in the South China Sea, where the United States also runs freedom-of-navigation patrols.

Last week, a U.S. warship sailed through the Taiwan Strait, angering China. (Reporting by Yimou Lee; Editing by Richard Pullin and Clarence Fernandez)

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