If he has 'loose lips' this may be the cause. If his jowls are not loose (this is breed specific, so don't know what your chi is mixed with), it could be a dental/medical problem. If not that, then he could be fearful/anxious when you pick him up (this happens more often than people realize, especially with small dogs that people tend to pick up a lot). Excessive drooling and panting can be a sign of fear/anxiety in an otherwise healthy dog. other signs to look for in an anxious dog can be found on these sites: <a href="http://www.diamondsintheruff.com/diagrams.html" rel="nofollow">http://www.diamondsintheruff.com/diagram…</a> <a href="http://home.no.net/solvt/dempende-eng.htm" rel="nofollow">http://home.no.net/solvt/dempende-eng.ht…</a> <a href="http://www.canis.no/rugaas/gallery.php" rel="nofollow">http://www.canis.no/rugaas/gallery.
Some dogs have more then others. If he has alot of wrinkles or droopy skin around his mouth saliva builds up and then will come out when he's more hyper or relaxes his face. If this isn't a factor for you then it could be from getting excited and his system pumps up and produces more saliva because of this. It's pretty normal though.