* China cross-border capital flows improved in first half - FX regulator
* Expects capital flows to be stable going forward
* China banks' H1 net fx sales fell 46 pct y/y (Adds regulator quote, SAFE data, background)
BEIJING, July 20 (Reuters) - China's foreign exchange regulator said on Thursday it expects cross-border capital flows to remain stable going forward as the domestic economy improves, an indication authorities' efforts to control aggressive outflows are working.
State Administration of Foreign Exchange spokeswoman Wang Chunying told a regular briefing China's foreign exchange supply and demand in the market remained stable in the first half of 2017.
"The balance (in the foreign exchange market) in the first half was the best in three years," said Wang.
In the first half of the year, Chinese commercial banks sold a net $93.8 billion of foreign exchange, down 46 percent from $173.85 billion over the same period last year.
Wang said she expects cross-border flows to remain stable due to China's own strong economic performance and more benign conditions externally.
Chinese authorities are currently seeking to reduce the chance of a financial crisis by steering the economy away from liquidity-fueled growth and deflating asset bubbles.
Those efforts include reducing disruptive capital outflows and intervening in foreign exchange markets to keep the yuan trade stable.
The Chinese currency has appreciated about 2.6 percent against the dollar so far this year, having fallen about 6.5 percent last year.
Fitch Ratings said on Thursday China's renewed commitment to contain financial risks signals a possible shift away from high economic growth targets, though policymakers were unlikely to tighten too aggressively.
President Xi Jinping said at the conference a new Financial Stability and Development Committee would be set up under the State Council, or cabinet, with the central bank assuming a bigger role in managing financial market risks.
Commercial banks' $20.9 billion in foreign exchange sales in June was the highest monthly figure this year but still less than half the volume seen in December. Despite the moderation this year, there has been no public indication from regulators that tighter rules on funds leaving the country would be relaxed.
Reuters reported on Monday that China's regulators have told banks to stop providing funding for several of Dalian Wanda Group's overseas acquisitions as Beijing looks to curb the conglomerate's offshore buying spree.
SAFE's Wang reiterated that the regulator supports legitimate overseas investment by Chinese firms but will continue to monitor risks.
New information disclosure requirements on personal foreign exchange purchases this year have curbed fraudulent purchases, Wang said, adding that the amount of foreign exchange purchased by individuals fell 4 percent in the first half of the year.
She also said that the regulator expects the risks of large-scale capital outflows from China to significantly ease in the future, while the impact of U.S. Federal Reserve's rate hikes on China's cross-border capital flows have diminished. (Reporting by Elias Glenn and Beijing Monitoring Desk; Editing by Sam Holmes)