Here are some of my favorite publications on Chinese myths and legends. Most links are for more info at Amazon.com, an affiliate.
The Monkey King: A Superhero Tale of China, Retold from The Journey to the West, by Aaron Shepard, Skyhook Press, 2008. My own retelling of the origin and first adventures of Monkey, taken from the epic’s first seven chapters. (The full text can be found on my Web site.)
Legend of the Moon Maiden, illustrated by Loke Diew Hong, translated by Koh Kok Kiang, Asiapac, Singapore, 1996. The seminal myth of Hou Yi the archer and his wife, Chang-e, in comics form.
Lady White Snake: A Tale From Chinese Opera, retold by Aaron Shepard, illustrated by Song Nan Zhang, Pan Asian Publications, Union City, California, 2001. My own picture book retelling of one of China’s favorite stories.
Ancient Tales and Folklore of China, by Edward T. C. Werner, Bracken Books, London, 1986; reprinted from Myths & Legends of China, George Harrap, London, 1922. An excellent compendium of stories.
Essential Chinese Mythology: Stories That Change the World, by Martin Palmer and Zhao Xiaomin, with Joanne O’Brien and James Palmer, HarperCollins, London, 1997. A fine overview, including Confucian, Taoist, and Buddhist mythology.
The Eight Immortals of Taoism: Legends and Fables of Popular Taoism, translated by Kwok Man Ho and Joanne O’Brien, introduction by Martin Palmer, Penguin, New York, 1990. A good introduction to these mythological saints of Taoism, and to Taoist mythology in general.
The 8 Immortals, illustrated by Chan Kok Sing, translated by Koh Kok Kiang, Asiapac, Singapore, 1996. Tales of the Eight Immortals in comics form. The longest and most popular tale in this book is available also as a separate volume, The Eight Immortals Cross the Sea.
Taoism and Chinese Religion, by Henri Maspero, translated by Frank A. Kierman, Jr., University of Massachusetts, Amherst, 1981. A detailed and insightful look at traditional Taoist mythology and spiritual discipline, as revealed (and concealed) in its literature.
Kuan Yin: Myths and Prophecies of the Chinese Goddess of Compassion, by Martin Palmer and Jay Ramsay, with Man-Ho Kwok, HarperCollins, London, 1995. Lore of this Buddhist deity—possibly the most popular deity in the world.
Mooncakes and Hungry Ghosts: Festivals of China, by Carol Stepanchuk and Charles Wong, China Books, San Francisco, 1991. Includes the myths and legends connected to the major Chinese holidays.
Origins of Chinese Festivals, compiled by Goh Pei Ki, illustrated by Fu Chunjiang, translated by Koh Kok Kiang, Asiapac, Singapore, 1997. The myths and legends connected to the major Chinese holidays, in comics form.
Larousse Encyclopedia of Mythology, Prometheus, New York, 1960. Includes a good overview of Chinese mythology.
Chinese Mythology: An Encyclopedia of Myth and Legend, by Derek Walters, HarperCollins, London, 1992. Includes lots of obscure, juicy tidbits.