It commemorates the beautiful, if not cheerful, story of the great poet Qu Yuan, who threw himself in the Mi Luo river in protest against the government. In order to try to save his body from being eaten by fish, people went out in boats and threw sticky rice cakes wrapped in leaves into the river. To honor Qu Yuan on this day, people around the world hold dragon boat races and eat zongzi, sticky rice dumplings (they can also be bought from Ranch 99 or other local Chinese supermarkets).
The full history of the day, and a biography of Qu Yuan, are on Wikipedia. Crayola has posted craft projects related to dragon boats, and this book,Awakening the Dragon: The Dragon Boat Festival, explains the holiday to kids. Here’s a recipe for zongzi.
Many Chinese communities around the world hold major dragon boat races to honor this day. The Bay Area waits until September, but if you want to get a head start on your planning, visit the website for the San Francisco Dragon Boat Race, the largest of its kind in the U.S.
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[This post is an update to a post on Hao Mama.]