31-year-old Alvarez was leaving Beauty & Essex in L.A. ... when a photog asked the world's top pound-for-pound pugilist about boxing the 4-0 fighter.

Here's how the conversation went ... translated from Spanish to English.

Photog: "What do you think of Jake Paul? Are you gonna give him a chance?"
Canelo: "Not right now."

Photog: "Why don’t you want to give him a chance?"
Canelo: "He’s not ready."

Photog: "Do you think it might be a good option?"
Canelo: "If he wants someone to fight, we have this guy right here ..." (Points to a friend)

Photog: "What needs to happen in order for you to give him a chance?"
Canelo: "He needs to keep improving. Good luck."

Photog: "What do you think of a fight between you and your brother vs. the Paul bros?"
Canelo: "No."

Of course, Paul -- who has wins over AnEsonGib, Nate Robinson, Ben Askren, and Tyron Woodley -- told TMZ Sports back in June that Canelo was on his (future) hit list.

Alvarez has not been a fan of Paul's foray into the squared circle ... previously telling us he believed the Paul brothers were disrespecting the sport.

But, now it seems Alvarez has changed his mind about Jake ... even if he stopped well-short of guaranteeing they'd someday fight.

BTW, Canelo was at Beauty & Essex for a meeting with Kendall Jenner ... and it seems a partnership with her 818 Tequila is in the works.