Culture Insider: China's Ghost Festival
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Floating water lantern
Among the various folk customs of the Zhongyuan Festival, the floating water lantern is the grandest. The water lantern, also called lotus lantern, is usually made by pasting paper into a lotus shape. Then a lamp or candle is placed inside. On the night of the Zhongyuan Festival, lanterns are released into rivers or lakes.
People think that they should hang out lanterns to celebrate the ghosts. As human beings and land belong to yang, which means positive, so ghosts and water belong to yin, which means negative. The dark and mysterious underworld usually reminds people of the gloomy sepulchral hell where the ghosts suffer. So lanterns are floated on the waters.