Chinese Ghost Festival is also called Zhong Yuan Jie, a traditional festival which falls on the 14th night and the 15th day of the 7th lunar month.
Zhong Yuan Jie has its roots in the Buddhist festival of Ullambana, and also some from the Taoist culture. The Buddhist origins of the festival can be traced back to a story that originally came from India, but later took on culturally Chinese overtones. The story, "Mu Lien Saves his Mother from Suffering in Hell", saying a man called Mu Lien that had magic power and saw her mother in the hell dropped into the mouth of hungry ghost and suffered. Mu Lien had no idea and asked the Buddha for help. The Buddha told him to save his mother 15th day of the 7th lunar month by placing sacrifices in Yu Lan Pen.
Ancient Chinese believed that 7th month in lunar calendar was ghost month, and the gates of hell would open from the first day and ghosts can freely roam on the earth for food and entertainment. And they would back to the hell on the 15th day. Buddhist and Taoist would hold ceremonies to relieve ghosts from suffering at afternoon or at night. Altars are built; rice and other foods were thrown into air in all directions for the ghost by the monks or priests.
Families would also offer food offerings, burning of underworld money and bags containing cloth for the visiting spirits of ancestors. Kinds of meals would be served with empty seats left for deceased in the family. The used are not normal candle we are using for lighting purpose. They are specially produced and color in red with some pattern or tattoo on the surface.
During evening, incense is burnt in front of the doors of each household for paying tribute to other wandering and homeless souls so that they won't bring misfortune and bad luck. Large offerings are also placed on the offering table to ward of bad luck. To make sure that all ghost back to heaven,
people would flew water lanterns on the river, which in shape of lotus or just a little paper boat.Ghost Festival is still celebrated in some parts of China, and most traditions are kept. People would still burn money paper and incense for ancestors and sacrifices offered on tables. It is just one part of Chinese Ghost Culture.