Hungry Ghost Festival
Ullambana Festival
The Hungry Ghost Festival is a traditional Chinese celebration observed by ethnic Chinese communities throughout the world. It is a festival dedicated to remembering those who have passed away, particularly for those who are believed to have gone to lower realms, such as the Hells.
It is believed that on the 15th Night of the 7th Lunar month (usually in July or August), the gates between the Hells, Heavens and the World of the Humans are open for free travel. The burning of joss paper, paper offerings, candles and offering of fruits are for the deceased, who are believed to haven't had much to eat or enjoy in a long time.
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The Buddha spoke of the Tirokudda Sutta and the Ullambana Sutra in the Theravada and Mahayana Traditions respectively, where the Blessed one explained about the realm of Hungry Ghosts, who roam the earth, all year round (not just for a day). They were once humans, but committed a lot of bad deeds while alive, resulting in heavy bad Karma, and now live in this realm, where they and forever hungry and are hardly able to eat.
In Buddhist beliefs, it is best for the living to do good deeds on behalf of them, so that when their time in their state as a Hungry Ghost is over, they will be reborn in a better place, or they would be reborn earlier than they should've. The burning of joss paper and other items is merely a cultural tradition. As Buddhism spreads around the world, culture and faith were brought together.