Korean Air is in talks to set up a Chinese air cargo joint venture with China Southern Airlines, Chinese state media reported on Friday.

The two sides were discussing a venture but had yet to reach an agreement, the official Shanghai Securities News reported, citing an unnamed source at China Southern, China's largest carrier by fleet size.

Korean Air previously said it was in talks with three or four Chinese companies to explore partnerships in the growing market. The company declined to give names.

China Southern also previously said it wanted to set up its own air cargo company, bringing in a strategic partner to invest in the project, the newspaper said.

It added the Chinese carrier expected details of an agreement to be finalized by the end of this year.

China Southern is also talking with other carriers from Asia, Europe and the United States, including Air France KLM, the newspaper said, citing unnamed sources at the airline.