In addition to the following folktales, I suggest you visit the Hilltown Families blog where there’s a great post called A Dozen by Demi: Books to Celebrate Chinese New Year!
8,000 Stones: a Chinese Folktale by Diane Wolkstein & illustrated by Ed Young
The Real Story of Stone Soup by Ying Chang Compestine & illustrated by Stéphane Jorisch
A stingy fisherman always makes his three young helpers do all his work. One day he scolds the “lazy boys” for forgetting to provide lunch. “Don’t worry,” they say. “We can make stone soup.” The boys dig a hole and fill it with water and “flavored” stones. They trick the fisherman into making bowls and chopsticks, and fetching salt and sesame oil. While he’s busy, they stir in bird eggs, add wild vegetables, and slip fish into the soup. By the time the old man returns, they have a feast fit for a king.
The Greatest Power by Demi
Emperor Ping, the boy emperor known for his love of harmony, sets a challenge to the children of his kingdom: show him the greatest power in the world. “To know the greatest power in the world is to know the greatest peace,” Emperor Ping announces. “Whoever knows this harmony will become the new prime minister.” The children get to work right away and have many bright ideas. The greatest power must be weapons! It must be beauty! It must be money! But as a young girl named Sing reflects upon the challenge, she wonders how any of those things, which cannot last forever, could be the greatest power in the world. She is certain there is something even more powerful, and the source of this power will surprise and delight her.