If a letter of intent is signed, it means China's SAIC will be in competition with Nanjing Automobile of China to buy the UK firm.
No formal bid has been tabled, but rival Nanjing has submitted a bid.
The Financial Times said Leach and SAIC president Chen Hong were understood to have had breakfast in London to discuss details of the letter of intent.
The plan could see the Rover 75 and sports cars built at Rover's Longbridge factory.
SAIC would produce engines at a plant in China, using machinery from Longbridge.