The practice of burning 'hell money' is popular among Chinese. It is commonly understood that the burnt offering will be received by the dead as real currency in the afterlife. My family used to practice it. When I was young, I helped to fold 'joss money' into the shape of ancient Chinese gold bar for burning.
I didn't know that the afterlife evolve according to our time. Nowadays I passed by shops that sell more than just hell money and joss money. There are paper iPad, smartphone, beer can, house, and even paper-maid (!) for burning. I guess, there is a general belief that the afterlife progresses along with the human realm.
Recently I came across a Buddhist website, Nalanda.org.my with an article describing the true meaning of the ritual:
The ORIGINAL meaning of such an act is to show everyone present that all former possessions of the deceased cannot be brought along to the next life. At one’s death, everything one had ever owned has to be left behind. The burning only emphasizes this message, as it is the most graphical, symbolic, and dramatic way of showing total loss!
Thus, the burning of cheaply-produced paper models and effigies served as an effective educational tool. Witnessing how fire consumes every ‘former possession’ of the deceased, even an illiterate peasant or young child was able to understand this sense of total relinquishment at death.
Today, this practice is completely misunderstood by the majority of Chinese. Instead of the original meaning, paper-made models have been turned into “paper offerings” – with the mistaken thought that whatever one burns, his departed relatives will obtain in the netherworld!
The article claims that the true meaning of burning paper offering to the dead is pedagogical. It is a symbolic way to teach the living about the impermanence of material possession. There are many who shared this article through social media, saying that it enlightens them on the true meaning of the practice.
But I'm not convinced; the article gives no historical source as reference.
The emergence of paper burning offering goes back to the 1st century when paper currency came into use. As Janet Lee Scott notes,
"Paper currency is important in the history of paper offerings concern spirit money. Dard Hunter wrote that by the reign of Ho Ti (He Di, 和帝, AD 89-106) paper was already a substitute for genuine coins, and paper cut into coin shapes was being burned to the spirits by the beginning of the Three Kingdoms Period (三國) from AD 221 to AD 420... By the Tang (唐), imitations of real paper money appeared during the reign of Kao Tsung (Gao Zong, 高宗)...."
(Janet Lee Scott, For Gods, Ghosts and Ancestors: The Chinese Tradition of Paper Offerings [Hong Kong: Hong Kong University Press, 2007], 26.)
A good study on the historical origin of this ritual is in the third chapter of C. Fred Blake's Burning Money: The Material Spirit of the Chinese Lifeworld (USA: University of Hawai'i Press, 2011). As I don't have the printed text, my citation is based on a proof copy.
In the chapter, Blake introduces several folklore about Cai Lun (蔡伦), a historical 1st century Chinese eunuch who is believed to be the inventor of paper. These stories go along the line that Cai Lun (or his family) needed a way to sell his invention (paper), so he tricked people into believing that when paper is burnt, it becomes money in the afterlife. Here is Yang Wanshang's version, reproduced by Blake:
In ancient times, a person named Cai Lun invented paper. People were anxious to buy the paper to use it to write on. His business flourished. Cai Lun’s sister-in-law [Hui Niang] noticed how profitable his business was. She asked her husband Cai Mo to learn how to make paper from his younger brother. As he was leaving to study his little brother’s trade, his wife enjoined, “Just study for a short while, then come back to start making money as soon as possible.” Cai Mo went to Cai Lun’s home. Three months later, he came back and opened a paper store. Because the paper he and his wife made was too coarse, they could not sell it. The paper piled up all over the place. The couple looked at the paper and they were much worried.
Hui Niang was an astute person. She came up with an idea. She whispered in her husband’s ear and asked her husband to follow her plan.
That night, Cai Mo wailed loudly. Neighbors did not know what happened to his family. They came over and found that Hui Niang had died. She had been put into a coffin. When Cai Mo saw that all his neighbors had come, he cried for a while and carried a bundle of grass paper (căozhĭ) indoors. He lit the paper in front of the coffin. He cried, addressing the coffin: “I learned the paper-making skill from my younger brother, but I was not so earnest, and the paper I made was not so good. This made you so angry and you died as a result. I will burn the paper into ash to quench your hatred.” He burned paper while he was crying. After he had burned the whole bundle, he carried in another bundle and continued to burn. He burned and burned, suddenly there were sounds from inside the coffin. It seemed that he did not hear the sounds, for he kept burning and crying. Suddenly, Hui Niang shouted from inside the coffin, “Take off the lid quickly, I came back!” All of the people were startled, they tried to be brave as they took off the lid.
Hui Niang sat up. She put on an act and sang, “In the yáng-world money can be used everywhere, but in the yīn-world business is also transacted; were it not for my husband’s burning paper, who would let me return home!” After the song, she tried to collect herself saying, “Just now I was a ghost (guĭ), now I am a human. When I got to the yīn-world, they had me push the mill to torture me. I suffered a lot. My husband sent me money. Little ghosts struggled to help me push the mill just for a little money—it was just like the proverb: with money you can buy the ghost to push the mill. The judge (pànguān) knew I had money so he asked me for it. I gave him a lot of money. This was the money my husband was sending to me. Then the pànguān furtively opened the back door of the earth bureau (dìfŭ). I was set free and came back.”
After hearing what his wife said, Cai Mo pretended to be lost and asked, “But I didn’t send you money, did I?”
Hui Niang pointed to the pile of paper on fire and said, “That is the money you sent to me. In yáng-world we use copper for money, whereas in the yīn-world, paper is used for money.”
Having heard this, Cai Mo ran out and carried two big bundles of grass paper inside. As he proceeded to burn it he cried, “Pànguān Pànguān, you let my wife come back, I am so grateful. I’m giving you two more bundles, please treat my parents well in the yīn-world; don’t let them suffer. When you run out of money, I will send you more.” With these words, he carried in two more bundles of grass paper to burn.
The neighbors were fooled by the couple. They thought that burning paper was really feasible. They scrambled to spend their money to buy paper from Cai Mo. Then they went to their ancestors’ tombs to burn paper. In no less than two days, the piles of paper in Cai Mo’s house were sold out. Ever since that time, the custom of going to the tombs to burn paper has continued. (pp.55-57.)
Blake also draws upon an early Buddhist text to highlight the practice of paper burning as offering to the dead:
"One of the first literary references to “paper money” is found in a seventh-century Buddhist text: The Forest of Pearls in the Garden of the Dharma (Fa yuan zhu lin) relates a ghost story in which a man with considerable knowledge of the spirit world tells how "everything of which spirits avail themselves differs from the things that are used by the living. Gold and silks alone can be generally current among them, but are of special utility to them if counterfeited. Hence we must make gold by daubing large sheets of tin with yellow paint, and manufacture pieces of silk stuff out of paper, such articles being more appreciated by them than anything else."" (p.65.)
Then he highlights some ancient Chinese intellectuals who practiced the ritual:
"...the philosopher Kang Jie (1011–1077), who lived in the century before Zhu Xi and burned mulberry-bark paper money (chǔqián) as part of the spring and autumn sacrifices to his ancestors. A contemporary, Cheng Yichuan (1033–1107), was amazed and asked the older Kang why he did this. Kang replied, Since grave goods (míngqì) are proper, why should offerings of paper money not give vent to filial sons and compassionate grandsons?" (p.68.)
Blake summarizes the five theories on the origin of paper offering,
"[My] approach to the history of the paper money custom is to entertain five hypotheses that purport to explain the advent and/or popularization of the custom. These are that (1) the custom derived from the Confucian tradition, especially as it was articulated in the classic books on rites [礼记]; (2) the custom became popular with the advent of printing on paper, which was spurred by the spread of Buddhist texts and talismans; (3) the custom developed as the ideological counterpart to the development of fiduciary papers with the increased velocity and distancing of commercial transactions; (4) the custom became popular as a way for common folks to economize on their offerings; and (5) the custom became popular as a way common folks could participate in the reproduction of cosmic and imperial order yet at the same time mock (in both senses of the word) the sumptuary rules by which imperial order maintained itself. This last explanation is one that I have added to the list of more conventional explanations, so it is the one I favor, although I realize that each explanation has its strengths and weaknesses and no one excludes the other four."
Where does the purported original meaning of the ritual as "to show everyone present that all former possessions of the deceased cannot be brought along to the next life" fit into any of these five hypotheses that are based on historical records? Seems like no where.
This does not falsify the claim made by the Nalanda article, yet unless we are shown the supporting historical sources, we have no reason to take it as true.