China's most-wanted fugitive, an official accused of embezzling more than $40 million, is in US custody, according to the country's top anti-graft agency.

Yang Xiuzhu, who fled China in 2003, was detained after entering the US using a fake Dutch passport last year, according to the Party's Central Commission for Discipline Inspection.

In the first confirmation of Yang's whereabouts in a decade, the commission's International Cooperation Department said she escaped from detention in the Netherlands in May 2014 - after being rejected for political asylum and before she could be sent back to China.