The Flag of the People's Republic of China, the "Five-Starred Red Flag (五星红旗 in pinyin: wu3 xing1 hong2 qi2)", was designed by Zeng Liansong (曾联松 zeng1 lian2 song4), an economist by trade and a talented artist who took residence in Ruian (瑞安 rui4 an1), Zhejiang. He designed it in response to a circular distributed by the Chinese People's Political Consultative Conference (CPPCC) in July, 1949, shortly after they came to power. Out of some 3,000 plus entries received for the design competition, Zeng's was chosen after being nominated as one of the 38 finalists. Mao Zedong himself personally hoisted the first of this flag on a pole overlooking Tiananmen Square on the day of the its revealing.
The design incorporates some of the well-known symbols of communism: blood red as its background and bright yellow for its stars. The larger star symbolizes the leadership of the Communist Party of China. Popular speculation has suggested that the four smaller stars represent the four classes: the workers, the peasants, the petty bourgeoisie, and the patriotic capitalists, though this is open, really, to interpretation.
The design went through several changes and was finally approved by the CPPCC on September 27, 1949 at their First Plenary Session. The original design plans consisted of several alterations in comparison with the modern-day flag, which is really a watered-down version at that. Originally, the flag had either a hammer and sickle embedded within the largest star (representing the unity of the combined strength of the government and its people), or several horizontal lines below the stars (representing the Han race and possibly the Yellow River). These ideas, however, were abandoned for a more "streamlined" and simplistic design.
See also: Flag of the Republic of China