The German website reports that scouts from both clubs are keeping an eye on the 17 year old, following his performances for Germany at the U17 World Cup back in October.
Jastrzembski has yet to play a senior game for Hertha but has an excellent record at both Under 17 and Under 19 levels. Although born in Germany, his Polish ancestry means he can play for either Germany or Poland, and he has played for both countries at Under 16 level.
The Gunners are likely to be interested in the winger as his youth contract with Hertha expires in the summer, and he will be able to sign a professional deal with any club he chooses.
Although City would no doubt have the financial muscle to land Jastrzembski, the wide man is believed to be an Arsenal fan which gives the Gunners the edge in the battle to sign the German Under 17 international..