 According to Robert D. San Souci (qv), who retold and researched  the original story, Disney didnt like the idea of putting in a  dragon as a companion for Mulan; they feared it would be too big and  menacing. San Souci explained to them that in Chinese lore, dragons  can be any size, so a small dragon was approved. Thus, Mushu was  born. This change is acknowledged when Mulan calls him "tiny" and  Mushu replies, "Of course! Im travel size for you convenience! If I  was my REAL size your cow (Khan) here would die of fright!"