According to Chinese mythology there was a horrible beast called Nian which lived on the mountains.
Towards the end of Winter when there was nothing to eat, Nian would come on the first day of New Year to the villages to eat livestock, crops, and even villagers, especially children.
The villagers would live in terror over the Winter, but over time they learned that the ferocious Nian was afraid of three things: fire, and noise and the colour red. So when the New Year was about to come, the villagers would hang red lanterns and red spring scrolls on windows and doors. They also used firecrackers to frighten away the Nian. From then on, Nian never came to the village again.