Having spent the whole year slaving away on his farm in north China's Hebei Province for a mere 3,000 yuan (US$375), Liu Zhenfeng found himself giving away a third of his annual income during the Spring Festival, or Chinese lunar New Year.

For Liu, the most important holiday for family gathering has become a painful period of enforced cash-splashing.

It is a Chinese tradition for families to gather together, visit relatives and exchange red envelopes with money, known as "hong bao", as a gesture of goodwill and kinship, particularly towards children.

But the custom, which is supposed to add to the festival atmosphere, has become a heavy burden for people from all over China. The distribution of gifts has become more frequent and the value of each gift has soared.

"I gave away several hundred yuan to members of my wife's family when we went to visit them this festival. To make matters worse, half a dozen children of my relatives lined up for a "hong bao" so I had to give at least 100 yuan," Liu said.

"There is no way out now the custom has been set in stone," he said.

Deng Guoxiong, a farmer in Tianmen City of central China's Hubei Province, works in big cities for about three months every year to pay the tuition fees of his two sons. But a wealth of New Year parties have drained his savings.

"I received more than 20 invitations to parties in the weeklong holiday. I had to prepare at least 1,000 yuan in gifts," he said.

"Giving 'hong bao' seems to be the best way of improving relations with neighbourhood, but it is a real headache for me," he said.

Experts believe Chinese people still give "hong bao" that they can not afford because they do not want to lose face in front of their family members and neighbors.

But this preoccupation with pride is not as evident in Hong Kong, where average incomes dwarf that of farmers on the Chinese mainland.

Seventy percent of Hong Kong citizens give just 20 Hong Kong dollars (US$2.6) in "hong bao", according to a study by AC Nielsen. Only 7 percent of them would give 50 Hong Kong dollars(US$6.5) or more.

"I think people in Hong Kong better understand the meaning of hong bao," said a teacher surnamed Lu with the No.1 Middle School in Hefei.

"Giving 'hong bao' has become a financial burden for parents while children become spoilt," he added.

His worries appear well-founded. Sixty percent of parents on the Chinese mainland admitted that their children's "hong bao" exceeded 1,000 yuan (US$130), according to an online survey.

Liu Liang, a student at a Hefei-based college in east China's Anhui, received 2007 yuan (US$260.6) from her relatives for the Spring Festival this year.

"I got 2006 yuan (US$260.5) last year," she said, grinning.

Students like Liu have become New Year quarry for banks and insurers, several of whom have designed tailor-made services to draw money out of the younger generation's pockets.

China Minsheng Banking Corp. Ltd. (CMBC) is offering toys to children who want to open their first account by depositing their "hong bao" money. China Construction Bank (CCB) is playing up to college graduates' egos by issuing a series of elitist credit cards to those who fulfill their criteria based on family and educational background.

Some Chengdu-based insurance companies are also offering medical insurance at special rates and education financing program for children, according to Sunday's West China City Daily.

While banks and insurance companies target the Chinese middle-class, private companies take advantage of their working-class employees.

Lu Qingzhou, who works in a local factory of 500 workers in Gushan town of northeastern Liaoning Province, has to give "hong bao" to curry favor with factory managers.

He is content with a monthly salary of 1,200 yuan but he grits his teeth at the prospect of spending more than 1,500 yuan on whathe calls "public relationships".

"Every time my leaders or their relatives hold parties, I hand out 'hong baos'. I have to do this as it keeps me in with a chanceof promotion," he said. "If I refused to give away that money, I could be squeezed out of my position," he said.

The curse of the "hong bao" has become so great for some Chinese people, particularly for migrant workers, that some chooseto avoid returning home for the Spring Festival.

Qin Yunhua, from Pingyu County of central Henan Province, has made his living by collecting rubbish off the streets of Taiyuan, capital of Shanxi Province, for nine years. He has not gone home for five years.

"I earn about 10,000 yuan every year. I would rather spend 400 to 500 yuan celebrating the holiday alone here than hand out 1,000 yuan to relatives in my hometown," 26-year-old Qin said.

"My relatives who farm in rural areas think I am richer than them since I work in the city. Once they see that my gifts are not as pricey as they expected, they think I am mean. I don't want to lose face, but I don't want to give away my hard earned money either," he said.

"People need to care for each other more than giving cash. It is not necessary to look impressive and show your love by spending beyond your financial capabilities," said Ding Ruiping, a sociologist with Shanxi Academy of Social Sciences.

(Xinhua News Agency February 27, 2007)