Arsenal cannot afford to pay for Yannick Carrasco after Chinese club Dalian Yifang offered the Belgian to the club.
The Gunners were hoping to bring in players this month with a centre back top of the list but also an attacking midfielder with Aaron Ramsey leaving and Ozil and Henrikh Mkhitaryan both failing to impress Emery enough.
However, they only have a limited loan budget available to them in January, with Barcelona’s Denis Suarez the club’s top target, meaning that Carrasco is off the table for the time being, according to Fox Sports Asia.
The highly-rated Belgian left Atletico Madrid on a bumper contract in China 12 months ago but is plotting a way back to European football.
Meanwhile, Nicolo Schira of La Gazzetta dello Sport claims Arsenal are in advance talks over the signing of Carrasco and Denis Suarez.
He claimed on Tuesday Özil ‘could be sold’ if Arsenal receives a ‘good offer’. He adds that Suarez has asked Barcelona to be sold, but there is still no agreement about the method of his transfer. The Gunners still want a loan with an option-to-buy, whilst Barcelona wants a permanent deal.