The economic risk of "moving from real to virtual" has been preliminarily contained in China, according to the country's banking regulator.

"Like taking hold of the nose of an ox, we grasped the main problems in the banking sector, namely the interbank, wealth management and off-balance-sheet businesses," said Xiao Yuanqi, head of the prudential regulation bureau of the China Banking Regulatory Commission, at a media briefing on Friday.

"In the last few years, these businesses grew fast and even wild, lacking restraint. And the problem of money idling was most prominent in these fields, rather than having the money flowing into the real economy," he said.

Banking regulators have launched a series of efforts to restore orders in the chaos since the end of March. As a result, business operation of the banking industry is becoming more standardized, with a gradual reduction of non-standard activities.

In the first half of 2017, the size of interbank business shrank for the first time since 2010. As of the end of the second quarter, the balance of assets and liabilities of the interbank business both dropped by 1.8 trillion yuan ($270 billion), compared with the balance at the beginning of this year, a decrease of 5.6 percent and 2.3 percent respectively.

The balance of wealth management products also reduced by 1.9 trillion yuan since the beginning of rectification, with its year-on-year growth rate dropping to single digit as of June 30, according to the CBRC.

"We hope that the rectification efforts will give the most evident and direct support to the real economy while making the least adverse impact on it," Xiao said. "That's why we focused on the interbank, wealth management and off-balance-sheet businesses."

China's top officials highlighted the importance of the financial sector to the real economy at the National Financial Work Conference in July, reiterating that prevention and control of financial risks is essential for systemic health.

To better implement the decision, Xiao said the CBRC will add and revise about 20 regulations this year to fill up regulatory deficiencies after conducting thorough investigations and research, as well as communicating repeatedly with relevant government departments and industry players.