KUALA LUMPUR—Malaysian officials believe China has been harboring one of the world’s most-wanted financial fugitives, the financier the U.S. Justice Department alleges is at the center of the $4.5 billion theft from a Malaysian development fund.

Singapore confirmed this summer that it has been pursuing 36-year-old Jho Low via an Interpol Red Notice for the past two years. Malaysia has been trying to arrest him since June.

But through June and into July, Mr. Low had been living freely in China, a person aware of his travels said.

Malaysian prosecutors sent a police contingent in June to search for him in Hong Kong and Macau. Both times, local authorities told them he had just flown out, Malaysian police said. Several Malaysian officials say they believe he is now being harbored in mainland China after helping the country with business deals and diplomacy as the 1MDB scandal blew up.

When Malaysian Prime Minister Mahathir Mohamad kicks off a trip to China on Friday for meetings with officials including President Xi Jinping, a request to extradite Mr. Low will be high on the agenda, said the officials, who are helping prepare for the trip. Malaysia doesn’t have an extradition treaty with China.