Known as Hotei (Japan) and Pu-Tai (China), these figures embody the ideals of the good life: i.e. health, happiness, prosperity and longevity.
They represent the later Buddhist notions that the good life was indeed attainable in this world. It consisted of self-mastery, a happy demeanor, purposeful endeavor, a deep commitment to the welfare of others and enlightened awareness.
Scholars believe that the Laughing Buddha is in fact modeled on an historical figure, a fat wandering Zen monk named Pu-tai. All sources describe him as obese, with wrinkled forehead, and a white protruding belly which he left uncovered. There was another feature of his bodily appearance that captured attention. Wherever he went, he wore a pu-tai (Japanese Hotei) or cloth-bag. Thus he came to be known as Pu-tai Hoshang or hemp-bag monk.
Legend has it that in this bag he carried candy for the children. Over the centuries within China, Buddhist notions of happiness based on self-mastery and enlightened insight were fused with popular Chinese life-ideals of happiness through material prosperity, thus today the hemp sack may be interpreted as filled with gold, filled with happiness, health, and other aspects of abundance.