The Ghost Festival (simplified Chinese: 中元节; traditional Chinese: 中元節; pinyin: zhōngyuánjié, alternatively simplified Chinese: 鬼节; traditional Chinese: 鬼節; pinyin: guǐjié) is a traditional Chinese festival and holiday, which is celebrated by Chinese in many countries. In the Chinese calendar (a lunisolar calendar), the Ghost Festival is on the 15th night of the seventh lunar month - actual day is on 2nd Sept.
In Chinese tradition, the fifteenth day of the seventh month in the lunar calendar is called Ghost Day and the seventh month in general is regarded as the Ghost Month (鬼月), in which ghosts and spirits, including those of the deceased ancestors, come out from the lower realm. During the Qingming Festival the living descendants pay homage to their ancestors and on Ghost Day, the deceased visit the living.
On the fifteenth day the three realms of Heaven, Hell and the realm of the living are open and both Taoists and Buddhists would perform rituals to transmute and absolve the sufferings of the deceased. Intrinsic to the Ghost Month is ancestor worship, where traditionally the filial piety of descendants extends to their ancestors even after their deaths. Activities during the month would include preparing ritualistic food offerings, burning incense, and burning joss paper, a papier-mache form of material items such as clothes, gold and other fine goods for the visiting spirits of the ancestors. Elaborate meals would be served with empty seats for each of the deceased in the family treating the deceased as if they are still living. Ancestor worship is what distinguishes Qingming Festival from Ghost Festival because the latter includes paying respects to all deceased, including the same and younger generations, while the former only includes older generations. Other festivities may include, buying and releasing miniature paper boats and lanterns on water, which signifies giving directions to the lost ghosts and spirits of the ancestors and other deities. - wikipedia!