A red packet or hong bao (紅包) is a gift of cash which is given in Chinese society. The name comes from the red packet that the cash comes in. It is called Lai Si (利是) in Cantonese.
Red packets are often presented on social occasions such as a wedding reception or a holiday such as Chinese New Year. They are also the standard form in which cash for political bribes are given in. The red of the packet symbolizes good luck and the amount of money in the packet is often some lucky number (such as a number containing many eights).
Gift giving practices in Chinese and Western society differ in one major respect. In Western society, it is often considered crass to give cash because it lets people know exactly how much was given and it allows the receiver to compare the amount that was given by different people. The theory of gift giving in the West is that it is the "thought that counts" while the actual value of the gift is secondary.
In Chinese society, the monetary value of the gift is very important and gifts of red packets are socially acceptable precisely because they allow the receiver to accurately measure the strength of a social relationship.
See also: Chinese social relations