The popularity of the Laughing Buddha has spread just the same as how the concept of Feng Shui leaped over the boundaries of China and spread all over the world. Feng Shui says that the Laughing Buddha brings prosperity and abundance in the homes of people. The name is intriguing, and there is a history behind this name. Similarly, there is a legend behind the appearance and clothes of the Laughing Buddha.
It is called Laughing Buddha, not only because of the way it looks, but also because the attributes it symbolizes. Also known as 'Hotei' or 'Pu-tai' in Japanese, it stands for contentment and satisfaction. Therefore, it is generally depicted as a fat man with a paunch, who is spreading the message of happiness through his wide and contagious laughter.
The second part of the name is 'Buddha'. This figure is called Laughing 'Buddha', because it is believed that he is one of the incarnations of Buddha, who is called Bodhisattva Maitreya (this name means the Buddha of the future).
The Laughing Buddha is often seen to be carrying a linen bag, which is considered to be full of wealth, and would never be exhausted of it. It is filled with treasures, like precious stones, food, and goodies for children which would fulfill all our wishes, and take away all the pains and agonies of the world. The bag has all the sources of happiness, be it material goods, or non-material things, like children, who are also considered to be a source of happiness.
Children are strongly associated with this figure. In the other representation is shown sitting in a cart which is being drawn by boys. In the latter, he is shown as carrying a fan, or to be precise, a 'wish-fulfillment fan', which was a common symbol for the Chinese aristocracy, and it meant that the wishes of the subjects would be fulfilled. The Laughing Buddha is often seen carrying a bowl, which is the mark of a Buddhist monk who was supposed to survive on alms.
It is believed by the Chinese, that thousands of years back, somebody like the Laughing Buddha actually existed and his name was Budai. He lived during the Liang Dynasty. He was Chan monk who was very generous and kindhearted. Considered to be one of the seven Gods by the Japanese, Taoists and Shintoists also revere him. It is said that if somebody rubs the belly of a Laughing Buddha, they'd receive wealth and good fortune. It especially brings great luck to restaurateurs and bartenders.