From The Wing Kong Exchange, the monster is referred to in the credits as "sewer monster", but an excerpt from the script describes it as:
the most horrific creature... thing... abomination... you ever saw. An
unnatural monster of myth and legend, a Chinese Wild Man made of flesh
and blood with long twisted locks of fire red hair, yellow teeth and
yellow eyes... the claws on his fingers that dig into Gracie's arms
recalling only death...
So the monster appears to be inspired by the Chinese Wildman (or Yeren), something akin to Bigfoot.
EDIT: On a side note, David Sirota from the The Huffington Post gives an interesting interpretation of this cult classic in geopolitical terms in his 2008 article "Big Trouble in Little America", assigning some symbolism to the reappearance of this Chinese Wildman character at the end of the movie:
The main character, Jack Burton (Kurt Russell), is obviously cast as
America. Indeed, director John Carpenter pretty overtly wants him to
be something of a Western cowboy. ...
Meanwhile, David Lo Pan and his gang are the Rest of the World, and
more specifically, the Non-Aligned Countries, otherwise known as the
Axis of Evil.
While Burton stumbles a lot and makes an idiot out of himself, his
lack of planning ultimately works. He defeats the evil foreigners,
saves the day and gets the girl (who he's too cool to keep around).
The moral of the story is that while America might make some
blockheaded mistakes, they're honest ones and because we're the "good
guys," we'll end up winning the day. There may be "big trouble" but
it's manageable because compared to American power, everything is
little (in the movie's case what's little is China, but it could be
anything -- Iraq, Al Qaeda, etc.).
That said, the tongue-in-cheek flavor of the film suggests Carpenter
is using the Burton character to deliberately ridicule American hubris
(and let's not forget the very end of the movie just before the
credits roll: the crazy-eyed demon about to get his final revenge on
Burton could be the world taking revenge on that hubris). So, in that
sense, the movie was actually a prescient warning -- one that's more
relevant today than when it first came out.
Then again, maybe the monster reappears simply to leave the door open for a sequel. ;)