Many contagious diseases and plagues were said to originate during the fifth lunar month when the Dragon Boat Festival takes place. Chinese people, especially children, made incense bags and hung them on their necks to avoid catching contagious diseases and to keep evil spirits away. Incense bags are made from a variety of sewn bags and include the powders of calamus, wormwood, and realgar, and other fragrant items. This tradition has been mostly abandoned.
Source:
http://www.chinahighlights.com/festivals/dragon-boat-festival-custom.htm
