By Li Zhihui, Huang Xin and Mu Dong

    BEIJING, Feb. 26 (Xinhua) -- Having spent the whole year slaving away on his farm in north China's Hebei Province for a mere 3,000 yuan (375 U.S. dollars), 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 (2.6 U.S. dollars) in "hong bao", according to a study by AC Nielsen. Only 7 percent of them would give 50 Hong Kong dollars(6.5 U.S. dollars) 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 (130 U.S. dollars), according to an online survey.

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

    "I got 2006 yuan (260.5 U.S. dollars) 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.