This is another of my childhood favorites. Don't remember who got it for me or where they found it, but I vaguely remember debating whether or not to pack it with me as I was putting together my backpack for the first day of first grade. The story is about a shepherd boy whose uncle is kidnapped by evil wizards who sets out on a dangerous journey into an enchanted forest to rescue him.

Here is the Amazon.com description for anyone interested:

In the mythic Celestial Empire of China long ago, Kung, a poor shepherd boy, sets out to find his uncle, who has been kidnapped. In a series of adventures, he battles evil wizards to save the world from their darkness. Kung receives help from Master Panda, the first Panda whom the world has known and one who possesses magical secrets. Panda gives Kung a magical ring which makes the wearer invisible. With this ring, Kung travels safely through the valley of the ice dragon and joins a traveling troupe of performers, complete with a dancing unicorn. In the end, he rescues his uncle, saves Panda from the grip of the evil wizards, and weds a princess.

Though it may sound like this description has some spoilers I remember several other things happening in the story that gave it its twists and turns.