World star Psy, whose real name is Park Jae Sung, has been frequently spotted in Shanghai with his family, sparking speculation that he may move to China.
"Psy and his family often appear in Shanghai, so there was a rumour that they may move here," a resident in the city was quoted as saying.
"Actually, he hasn't moved here yet. I heard that he occasionally comes to China to learn the culture and language. Even his children have been learning Chinese with him," another resident was quoted as saying.
The 36-year-old singer, known for his hit song Gangnam Style, has twin daughters with wife Yoo Hye Yeon.
Hallyu experts said the Korean Wave has spread throughout China thanks to idol groups, but that that combined with Psy's popularity could create great synergy.
The world star topped Chinese SNS site Weibo in 2012 in just three months of creating an account. Psy had the most followers among Korean celebrities. Although his popularity was high in China, he had concentrated on his work in the US at that time.
Psy's management agency, YG Entertainment, is about to hold its first concert in China in October.
Psy's possible activities there may be part of the entertainment agency's strategy to advance into the Chinese market, after chief Yang Hyun Suk announced YG would dominate the fashion and entertainment markets there.