TAIPEI, Feb 6 (AP) -- President Chen Shui-bian on Monday sought to ease concerns about his perceived hard line toward rival China, saying Taiwanese will be allowed to do business on the mainland as long as their investments aren't at the expense of the island's economy.

Chen was apparently hoping to allay fears that he was tightening control of mainland investments after a hard hitting speech during the Lunar New Year sparked a sell-off on the island's stock market last month.

Chen said that trade across the Strait that separates Taiwan and mainland China should seek a "balance between the individual firm's interests and the overall interests of the nation."

"You will be respected if you unite and join hands to fight for Taiwan _ your common home," Chen told a group of Taiwanese businessmen who have investments on the mainland.

Taiwan and China split amid civil war in 1949. Beijing has repeatedly threatened to invade Taiwan, an island 160 kilometers (100 miles) off the mainland, if Taipei tries to formalize its de facto independence.

Chen urged the business people to follow the examples of the legendary Chinese merchants of the 1800s who returned to rebuild their impoverished homes in Shanxi and Anhui provinces after making great fortunes in the richer cities.

After making money in China, Taiwanese should invest their profits at home or set up corporate headquarters in Taiwan, he said.

It is rare for Chen to cite any Chinese examples to make a point as the independence-leaning president has sought to emphasize Taiwan as a self-ruling entity with a distinct culture and history.

Taiwanese business leaders want their government to remove trade and investment barriers to help ease tensions with China.

Despite political tensions, Taiwanese have poured considerable money in China, with investments over the past 15 years estimated to total more than US$100 billion (€80 billion).