Bild claimed last month that the Reds were lining up a club record bid for the Borussia Mönchengladbach midfielder who has three goals in 23 appearances this term, as well as three red cards.
Jurgen Klopp’s side require some creative spark in midfield, but they face stiff competition in the race to sign the Swiss international.
The report in the Express notes that Arsenal are also interested in the 23-year-old, who ruled out a move to China in an interview with German outlet SportBild: “I can only speak for myself, but at my age I would never go to China, for no money in the world.
“The sporting perspective and everything else would need to be right.
“Honestly, you want experience such a positive vibe, such a togetherness in football often. That counts too.
“And should I one day want to make the next step, it also has to be an improvement.”
Xhaka admitted that he would be tempted by Manchester City, who will have Pep Guardiola as their manager next season.
“But true, it’s difficult to say no when Manchester City want you and you could play there. That much I have to admit. But I certainly not the only one.”
The likely lack of Champions League football will be a problem for Liverpool in terms of attracting elite players, but the Reds will hope that the prospect of being coached by Klopp will lure some top talent to Anfield.