Evidence status: WELL SUPPORTED — exact origin complex
An envelope.
Some money.
One very important colour.
Across Chinese communities around the world, the red packet is one of the most recognisable signs that the New Year has arrived.
The money matters.
But the colour matters too.
The Short Answer
Giving money in red envelopes at Lunar New Year is particularly associated with Chinese culture and Chinese communities worldwide, where the envelopes are known as hóngbāo in Mandarin and lai see in Cantonese.
The underlying tradition of giving protective or auspicious money is older than the modern paper envelope.
Recent historical research traces important predecessors to ancient Chinese coin charms and later customs of giving children money intended to protect them and wish them good fortune.
Red eventually became the natural wrapping because in Chinese culture it has long been associated with happiness, celebration, prosperity and protection from harmful forces.
The famous story about a demon named Sui being frightened away by coins wrapped in red paper is traditional folklore rather than a securely documented historical event.
What We Know
Lunar New Year is not one single uniform Asian festival.
Different countries and communities celebrate according to their own calendars and traditions.
The red-envelope custom is especially prominent in Chinese New Year celebrations and in Chinese diaspora communities, although related money-gifting practices exist elsewhere.
At New Year, older family members commonly give money to children and younger relatives.
The gift may be called yāsuìqián, traditionally interpreted as money intended to suppress or ward off harmful forces associated with the passing year.
The modern form places the money inside a bright red paper packet.
The British Museum holds numerous examples of hóngbāo and lai see used for Chinese New Year, decorated with symbols and written wishes for:
good fortune,
long life,
prosperity,
and abundance.
How It Became a Habit
Money is useful.
A blessing is symbolic.
The red envelope does both.
The cash allows the recipient to choose what to do with the gift.
The wrapper transforms ordinary money into ceremonial money.
It is no longer simply currency.
It comes from someone older to someone younger.
From employer to worker.
From married relative to unmarried family member.
From one generation to another.
That social relationship is part of the gift.
Modern research on hóngbāo describes the packet as a connector between generations and communities rather than merely a convenient way to hand somebody cash.
The Story Everyone Tells
The best-known legend involves a demon called Sui.
On New Year's Eve, Sui supposedly visited sleeping children and touched their heads, causing illness.
One family gave their child several coins to play with during the night.
The child eventually fell asleep.
The parents wrapped the coins in red paper and left them beside the child.
When Sui approached, the coins flashed with supernatural light and frightened the demon away.
Other parents copied the protection.
The practice became yāsuìqián.
Eventually the money was placed inside the red packets used today.
It is an excellent story.
It should be treated as a legend.
What the Evidence Actually Says
The custom developed over a long period.
Historian Ming Gao traces important roots to coin-shaped protective objects used as early as the Han dynasty, although the modern paper hóngbāo emerged much later.
That means it is misleading to picture Han-dynasty grandparents handing children envelopes identical to those used today.
The role of red is much easier to understand.
The Smithsonian's National Museum of Asian Art notes that red has for centuries been associated in Chinese culture with:
celebration,
fertility,
prosperity,
power,
and repelling evil.
So:
DOCUMENTED: Chinese New Year includes a long-established tradition of giving money to younger relatives.
DOCUMENTED: Modern hóngbāo and lai see use red packets decorated with auspicious imagery and wishes.
WELL SUPPORTED: Older protective-money and coin traditions contributed to the custom.
WELL SUPPORTED: Red is used because of its powerful auspicious associations in Chinese culture.
FOLKLORE: The demon Sui story explains the tradition symbolically but should not be treated as a documented historical event.
Different Elsewhere
Red envelopes are not universal to every Lunar New Year celebration.
Korean New Year has its own money-giving traditions.
Vietnamese communities have related lucky-money customs.
Japanese New Year includes otoshidama, usually money given to children in decorative envelopes, but not necessarily red.
Even within Chinese communities, etiquette differs.
Who gives.
Who receives.
How much money is appropriate.
Whether particular numbers are lucky.
All can vary by region and family.
The tradition is shared.
The rulebook is not.
Why It Stuck
Because it turns money into a message.
A plain banknote says:
here is some cash.
A red New Year envelope says:
I wish you luck.
Prosperity.
Health.
A good year.
And I am passing those wishes from my generation to yours.
The packet is small.
The meaning is not.
Related Curiosities
Why Do We Make New Year’s Resolutions?
Why Do Spaniards Eat Twelve Grapes at Midnight on New Year’s Eve?
Why Do Italians Wear Red Underwear at New Year?
Why Do We Hang Stockings at Christmas?
Sources & Further Reading
Lund University — historian Ming Gao, “What is the story of hongbao?” — research into the historical development of red envelopes and protective money.
Smithsonian National Museum of Asian Art — “Chinese Red” — history of red as an auspicious and protective colour in Chinese culture.
Smithsonian National Museum of Asian Art — “Lunar New Year: Then and Now” — modern family experience of receiving red envelopes.
British Museum — hóngbāo and lai see collections — surviving examples of lucky money envelopes and their symbolism.
Last checked: 19 September 2026