The accepted answer is simply wrong.
It is probably from a Chinese folk tale since it claims to be Chinese. I daresay I have read similar folktales, especially the swallow-the-bead-and-turn-into-a-dragon part, when I was a kid. I cannot figure out the exact one. But it is easy to search out folk stories with similar motifs.
This story lacks the part of the magical power of the dragon bead, but retains the part of swallowing the bead to become the dragon.
This one is rather long, but the story is almost the same, which is easy to find if you can read Chinese.
A further question is whether this kind of folktale has a origin in Classical Chinese literature.
And I must say many Chinese folk tales have a style and sentiment that you won't find in classical Chinese literature. Not to say even China proper is a country that comprises several distinct territories, varied cultures, and peoples. It is always hard to say what is really "un-Chinese".