SHANGHAI - The Chinese Football Association (CFA) warned on Tuesday that it is watching closely and will punish teams that flout its transfer rules, following reports two clubs are battling to sign striker Pierre-Emerick Aubameyang.

Chinese Super League (CSL) champion Guangzhou Evergrande is reportedly prepared to pay at least $84 million for the Borussia Dortmund star, trumping an offer by rival Beijing Guo'an.

It is believed Evergrande, coached by Italian World Cup winner Fabio Cannavro, has agreed a deal to acquire Gabon international Aubameyang when the Bundesliga season wraps up in May.

The CFA last year introduced a 100 percent tax on incoming foreign transfers in an effort to encourage Chinese clubs to invest in local youth players, but media reports suggest both clubs are prepared to either incur the penalty or somehow find a way to circumvent it.

While not naming Aubameyang, the CFA made clear its anger at the possible move in a strongly worded statement.

"The news of two clubs suspected of engaging in a bidding war on a transfer has caused social concern," it said, adding it was "highly concerned" and had asked the clubs to explain.

"In the next step of the investigation, if any violations are found, the CFA will handle this seriously according to law and regulation," the statement continued.

"We will watch closely every club's transfer movement in the new season and increase scrutiny. The CFA will seriously investigate and will not tolerate any violation or any loophole-exploiting behavior."

The hard-hitting missive is the latest salvo in the Chinese government's war on "irrational" overseas investments and in attempts to rein in CSL clubs that have shelled out record amounts to bring in foreign players.

A year ago, Shanghai SIPG smashed the Asian transfer record in order to sign Chelsea's attacking midfielder Oscar for $71 million.

However, with the 100 percent levy in place last summer, Tianjin Quanjian appeared to get around it by securing French striker Anthony Modeste from Cologne on a two-year loan deal, rather than purchasing him outright.

Among a raft of new measures introduced for the 2018 season to encourage CSL teams to field Chinese youngsters, the number of foreign players on the pitch cannot exceed the number of local under-23 players, while clubs can only field a maximum of three foreigners.

Agence France - presse