Excerpt from me blogspot :D
The july is here , so bevare :P
The fifthteenth day of the seventh Lunar month is in Chinese tradition considered a Ghost day ( festival ) while the whole 7th month ( both Lunar , and the common calendar 7th month aka July commonly ) is considered a Ghost month in all the sense of the word.
Just like on Haloween , or Dia de los Muertos , or St. John's day ( Holly day of Voodoo ) in Louisiana , this is time of year when the veil is rather thin indeed , and the dead walk among the living.
In the Chinese tradition on this day and on whole month the gates of lower plains are opened and both the ghost of deceased visit their families and cousins and spirits walk among humans too. Some Chinese folk say that many of them spirits are in rather nasty mood and try to find someone to take their place in lower plains ( kind of like He*l ) in order that they could be set free and roam the Earth.
This is why cunning Chinese folk protect themselves and appease the ghosts and spirits