The tradition of giving red envelopes dates back thousands of years to the practice of elders threading coins on red strings to gift to children, believed to ward off the demon Sui who would pat sleeping children on the head and cause illness or fear.

Over centuries, the loose coins became folded inside red paper, evolving into the elegant red envelopes we recognize today. The color red carries deep symbolic power in Chinese culture — it represents good luck, joy, and the driving away of evil spirits and negative energy.

Traditionally, married adults — particularly those with stable incomes — give red envelopes to children, unmarried young adults, and elderly relatives. The gift flows downward from elders to the young, and represents a transfer of blessing and protection.

The amount inside is carefully chosen. Even numbers are preferred (odd numbers are associated with funerals), and amounts containing the digit 4 are avoided as "four" sounds like "death" in Chinese. Amounts with 6 (flow/smooth), 8 (prosperity), or 9 (longevity) are especially auspicious.

In Vietnam (Tết), red envelopes are called lì xì and are given with the phrase "Chúc mừng năm mới." In Korea (Seollal), the tradition is called sebae-don — money given after performing the deep bow of respect (sebae) to elders. In the Philippines, the tradition is known as aguinaldo among Chinese-Filipino families.

In Singapore and Malaysia, the Cantonese term "Ang Bao" or Malay-influenced "Angpao" is used. The envelopes may be gold, orange, or other auspicious colors in addition to red depending on the region.