The Dalian Yifang star was heavily tracked by the Gunners back in January before talk of a transfer went quiet.
But Arsenal appear to have revived their interest and look close to finally securing a deal.
The Daily Mirror report north London chiefs are increasingly confident Carrasco will be playing for the Emirates outfit next season.
The 25-year-old has made no secret of his desire to leave China for a return to Europe in recent weeks.
“The whole world knows that I want to return to Europe,” he said.
“Now, it depends on the president and I hope he finds a solution.”
But the Belgian was less than forthcoming when quizzed specifically about Arsenal.
“I can’t speak about the club,” he added.
“Now I am not the one who chooses, but my president.
“He decides if he lets me go or not, but I hope I can come back.”
The Gunners will be on the lookout for some new attacking outlets after losing Aaron Ramsey, Danny Welbeck and loanee Denis Suarez in recent weeks.
Carrasco showcased his talent when plying his trade for Atletico Madrid before securing a mega-money switch to the Chinese Super League.
The 25-year-old has spent little over a year at the Asian outfit but has now revealed his desire to leave on multiple occasions.
Carrasco has been used by Belgium in their recent European qualifiers against Cyprus and Scotland.
The attacker was playing alongside Eden Hazard, who has recently completed his move to Real Madrid.
And Carrasco has backed his national team colleague to succeed in the Spanish capital.
“He’s one of the best players in the world and can go anywhere and do well,” he said last week.
“If he went there [Real Madrid] he could be an important player for them just as he has been for Chelsea and Belgium.”