Chinese welcomed the arrival of the Year of the Ox with raucous celebrations on Sunday despite gloom about the economy, setting off firecrackers in the streets and sending fireworks into the sky.
Celebrations were expected to carry on into the early hours of Monday, officially the first day of the Lunar New Year.
But in the commercial capital Shanghai, one person was killed in an explosion near a police station, state-run Xinhua news agency said. The cause was under investigation.
Residents in Beijing braved freezing temperatures to let off brightly coloured fireworks, clouds of smoke and a hail of red wrappings from firecrackers covering streets and explosions shaking windows.
"The economic crisis makes no difference. At New Year it's important to set off lots of fireworks," said Lao Xing, a housewife from the Beijing suburb of Pinggu.
Premier Wen Jiabao, who in previous years has spent the holiday with everyone from AIDS patients to coal miners, visited survivors of last May's earthquake in Sichuan that killed more than 80,000 people.
"It's been eight months since the earthquake, and I'm very happy to see how you've all been rebuilding your homes," Wen was paraphrased by the China News Service as telling survivors in Beichuan, the quake's epicentre.
President Hu Jintao went to the old revolutionary base of Jinggangshan in central China to visit heroes of the war that brought the Communists to power in 1949, and visited local villages, state television said.
"I'm extremely pleased to see you becoming more prosperous by the day," Hu told a crowd of cheering villagers.
Earlier, people packed temple fairs and hurried to train and bus stations to get home for the traditional holiday.
At Beijing's Temple of the Earth, people crowded into a fair featuring everything from break-dancing to re-enactments of imperial sacrifices.
"I've brought my parents here so they can enjoy a bit of traditional culture. Just like everyone else I hope that life this year will be a little better than last year," said lawyer Angela Zhu, 29, taking her parents around the fair.
"The holiday gives us a chance to escape our ordinary lives and enjoy hope for the future," she added.
The Transport Ministry said more than 63 million trips were made on Saturday as people travelled home for what for some is their only holiday of the year.
Even with the global economic crisis starting to affect the world's most populous country, many chose to take their vacation overseas, helped in part by a strong Chinese currency, state media said.
In Shanghai, demand for holidays to Europe and Australia during the Lunar New Year had soared, although domestic tourism fared less well, Xinhua said.
"The number of people travelling domestically is only a quarter of last year," it quoted travel agent Lu Min as saying.
"This indicates that the economic downturn has not taken its toll on high-income people, but has much affected those on middle or low incomes," Lu said.