Every year on the eve of the Chinese New Year, the nian monster (年獸; nián shòu) comes out from hiding and eats people. I was told as a child to behave, or the nian monster would catch you and eat you. It has the head of a lion but the body of an ox. After all the chaos it causes, the people find out that the nian monster is afraid of loud noises and the color red. That is why we set off firecrackers every new year, because the firecrackers are red and the explosions scare the monster away. For the same reason, we wear red too, and give out red envelopes of money. If we put the red envelopes under our pillows, then we would avoid the nian monster and we would have good fortune for the rest of the year.
The practices the informant mentioned are traditional customs that are practiced every year during the Chinese New Year festival (which some may argue is a misnomer, because several places celebrate the same holiday). It is interesting to note that the nian monster is named after the Chinese term for “year”, as if the coming of a new year could be something symbolically destructive or at least menacing.