A constant feature in all things Chinese is the color (colour, for those yank-challanged among y'all) red.
As common knowledge goes, it is because red is considered to be lucky.
Here we have an old tale in China, saying that there is a beast called the "Nian" (年獸), and it will only attack people in spring. But it's afraid of all things red.
That's why Chinese people use many red things in the lunar new year (also in spring). It became a common color represent "lucky" in Chinese culture.
More information about Nian can be found here: http://en.wikipedia.org/wiki/Nian
There is probably no one reason why red is considered lucky. But one thing that would encourage it is that China has long had good sources of deep red mercury based pigments. In the ancient world, east or west, strong colored dyes and pigments were hard to find, and people liked them. In the Mediterranean world look at the history of Royal Purple made from certain snails (https://en.wikipedia.org/wiki/Tyrian_purple).
Taoist and other ancient Chinese practices associated red mercury ores with blood, and associated the ores and mercury itself with long life. These things were rare enough be valuable but common enough in China to become standard things. And the red mercury compounds are easily made into dyes and pigments-- unlike the green and other colors of jade for example. I do not say this had to make red the color of good luck, but it did make red a natural candidate for that.