The Gunners boss says his club are interested in signing the 22-year-old midfielder, but adds that the pressure of finding "the next Lionel Messi" makes recruitment more difficultArsenal boss Arsene Wenger says his club are interested in signing Schalke's young star Lewis Holtby, but would not reveal whether they would bid for him in January or wait until his contract expires in the summer.
The 22-year-old midfielder has attracted interest from a host of clubs around Europe, and will be available on a free transfer at the end of the season after declaring his intention to refuse any new deal from the Bundesliga club.
And while the Gunners boss revealed his interest in Holtby, he says the pressure is always on during every transfer window to "secure the next Lionel Messi" - and claims he will have to look further afield for new talent.
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"We have looked at [Holtby], yes," he told reporters.
"People want to see the next Lionel Messi - they don't want to see a promising guy. The name of the player gives people hope, but when they haven't heard of them people are already sceptical.
"It's much more difficult for us now. The competition is higher. We are trying to diversify a bit more because we are limited in England. A new market that is very interesting is Japan - it's very competitive.
"The country where we were really competitive in the past was France, but they produce less top players than they did, say, 15 years ago.
"The emerging countries look to be Germany and Spain - they have taken over from France and they have many good, young players."
After the loss of Robin van Persie to Manchester United in the summer, Wenger secured Montpellier forward Olivier Giroud - but reveals he came close to signing Demba Ba, who is set to move from Newcastle to Chelsea this January.
"It was Giroud or Demba Ba in the summer - they are very similar players. I was a bit cautious about the noises on Ba's knee injury, but someone told me the problem he has is manageable and can be prevented," he added.