According to legend, the Chinese lunar calendar was invented by the mythical Yellow Emperor, Huangdi, said to have reigned from 2698–2599 BCE. The Yellow Emperor is also traditionally credited as the originator of Chinese medicine and astrology.
Early oracle bones and inscriptions on turtle shells already show evidence of calendar calculations, used mainly to time sacrificial rites honoring the deceased kings of a dynasty. It's largely from these oracle-bone inscriptions that historians have been able to reconstruct the names and reigns of the rulers of the Shang dynasty.
A pure lunar calendar divides the year into 12 lunar phases — the time the moon takes to orbit the earth, from full moon to full moon, roughly 29.53 days per cycle. That makes a lunar year only about 354 days long, which doesn't line up with the roughly 365-day solar year — so a purely lunar calendar can track the phases of the moon but not the seasons.
The Chinese calendar is therefore a lunisolar calendar: an extra day, or even an entire extra month, was periodically inserted to keep the lunar and solar cycles in sync.
The lunar calendar remained China's official calendar until 1911, the year the Qing dynasty fell. On January 1, 1912, with the founding of the Republic of China, the solar Gregorian calendar was adopted. Traditional Chinese holidays such as Chinese New Year, however, are still calculated and celebrated according to the lunar calendar.
In some parts of Asia, older generations still calculate and celebrate their birthdays by the lunar calendar, while younger people tend to use the solar calendar — sometimes leading to family members celebrating birthdays according to two different calendars entirely.
