The Chinese website is one of the largest social networks in China, with an estimated 7m users, many of whom are college students.
The move would give Facebook a ready-made entry into the largest internet market outside the US, and would mark the first time it has employed acquisition as a growth strategy.
Facebook already boasts more than 100,000 users of its English-language network in China and recently signalled its intent to launch a local-language version by registering the domain facebook.cn.
This morning, Facebook denied the speculation. Brandee Barker, a corporate communications officer at Facebook, said: "Facebook has no plans to acquire any company in China.
"In the coming months, internationalisation of the Facebook website is priority and those efforts will support multiple markets around the world."
Facebook has also been linked to Tianwang, a Chinese search engine, and Xiaonei.com, a Chinese social network.
Xianonei claims to have 8m active users in almost 8,000 colleges and universities in China, and also has a similar appearance to Facebook.
It was acquired last year by Chinese new media conglomerate, Oak Pacific Interactive, which is reported to have registered a Chinese internet address called Facebook.com.cn.
China's fast-growing consumer population has made the country a prime target for US internet giants such as Yahoo, Ebay and Google.
However, all three have yet to achieve the success they aimed for, even Google has faltered in its initial attempts. The US search giant is being eclipsed in China by Baidu.com, which accounts for about 60% of the search market in China, three times as much as its US rival.
It is estimated that China has some 162m internet users, and according to a recent poll, the average Chinese user spends between 14 and 19 hours a week online, compared with between seven and 10 hours in the US.