Based on one of the Chinese New Year Legends about monk Hongjun Laozu
http://en.wikipedia.org/wiki/Hongjun_Laozu

Many years ago in China lived the terrifying beast called Nian. Every year beast used to walk down from mountains to terrorize people of China celebrating new year. Frightened people went to seek help from wiseman named Hongjun Laozu. Monk decided to confront the beast in its nest. Nian laughter at poor old man and was about to eat him when Laozu proposed a challenge to beast. He convinced the monster to first eat all poisonous animals for nearby lands. With a great satisfaction of completing the challenge beast returned to end the life of poor monk. Laozu however knew the beasts secret and suggested taking off his clothes so he would taste much better. Upon seeing red undergarments Nian started to panic, screaming how much he cant stand the red color. Seeing so Laozu returned to village to gave this knowledge to people so they would decorate their houses with red colors upon new year celebrations. He also asked for a horse so he could ride to nearby towns and villages with red ribbon attached to his scepter to warn other people about Nian weakness.