TAIPEI (REUTERS) - The mayor of Taipei said on Thursday (Aug 1) that he will form a political party to run in Taiwan's 2020 elections, a move that could complicate President Tsai Ing-wen's re-election and shake up the political landscape amid heightened tension with China.

Taipei mayor Ko Wen-je said he will set up the Taiwanese People's Party in early August in a bid to run in legislative elections in January.

The self-ruled island is also set to hold its presidential election in January at a time of precarious relations with China, which considers it a wayward province and has never ruled out the use of force to bring it under Beijing's control.

Mr Ko, who advocates closer cross-strait ties and is known for his colourful comments about Taiwan politics, said he will decide whether to run in the highly competitive presidential race by early September.

"It's not important whether I run (for the president) or not. What matters is the well-being of the people," Mr Ko told reporters in Taipei.

Another who could complicate Ms Tsai's bid for re-election is Foxconn founder Terry Gou.

Mr Gou lost the presidential nomination for the China-friendly opposition Kuomintang (KMT) last month, but has not announced whether he will run as an independent in 2020.

A mayor from the island's south won the KMT's nomination for the presidential election, issuing a direct challenge to Ms Tsai.

The Taiwan President is facing criticism over her party's reform agenda amid rising diplomatic and military pressure from Beijing.

China said on Wednesday it will stop issuing individual travel permits to Chinese citizens for travel to Taiwan, a blow to the island's tourism industry.

China's military is also holding exercises this week in waters near Taiwan, days after Beijing reiterated it was ready to fight if there was any move towards independence for Taiwan.