Chinese folklore and literature are full of ghosts. The most famous is probably Lin Siniang, although thanks to the 18th century novel The Dream of the Red Chamber she is known as a beautiful woman warrior rather than a revenant, a concubine general who dies in battle fighting with her royal lover for the Ming dynasty as it falls. That Lin Siniang lives in the YA imagination as a kind of Chinese Woman King.
However, in half as dozen narratives
written a century earlier, after the fall of the Ming dynasty in 1644, she is, first and last, a ghost. In five of these accounts, she rises from her tomb near the ruined palace of the Prince of Heng and appears to an industrious bureaucrat, Chen Yaobao, seeking company and feasting. These stories are filed with nostalgia for the fallen dynasty. The scholar Judith Zeitlin, in her studies of seventeenth century Chinese literature, assigns them to the genre she calls "The Return of the Palace Lady" in which, typically, a beautiful woman who may have been a concubine or junior wife or died unmarried, rises from a haunting locale to haunt a living man and very often engage him in love and sex. 
The sixth of the early version of the story of Lin Siniang is the one that has seized my interest. The ghost here is not a palace lady but a girl of good family who was proud of maintaining her virginity until her suicide. This version was written by Lin Yunming in 1667. The author says not only that he heard the details from the mouth of Chen Baoyao, the Qing dynasty official who was haunted by the ghost, but that Chen paid him to write the account.
I want to call this version of the story "The Beast Becomes Beauty". It's a story to dream on - and maybe to act on. In summary:
Day and night the imperial offices are plagued by falling tiles, collapsing walls and flying whizzbombs. An exorcist is summoned, defeated and humiliated.
Liu, a friend of Chen, stops in Qingzhou,
appraises the situation and tells him he has himself to blame.
“You’ve only yourself to blame for this trouble. There’s a universal principle that where you have yang, you must also have yin. If you hadn’t been so eager to drive this poltergeist out, it would never have wound up bothering you to this extent!” 
The ghost appears and thanks Liu for his counsel. It appears more frightful than ever. However, Liu looks calmly at its hideous features and says, "Please change this face for another."
The ghost goes into the dark of another room. It returns as a beautiful woman, elaborately coiffured and richly dressed in mermaid silk and filmy gauze with no hint of a seam, exuding an unknown, intoxicating perfume.
The monstrous ghost now becomes friend and ally. She becomes Chen's writing partner, composing poetry with him during drinking sessions. She helps
him in his government job to assess cases and draft documents. His reputation
soars. She leaves him after 18 months and he cherishes her memory.
It's not very clear in the story just why the girl who became a ghost killed herself or why she decided to haunt Chen - except that she and Chen and the wise friend all apparently came from Fujian province. Several sources confirm that an imperial official named Chen Baoyao really did describe his ghostly encounter to Lin Yunming. Those details are less interesting than the wonderful guidance we get on facing our fears from Liu, the counselor, which we might summarize as:
* Recognize the need to balance dark and light, yin and yang, masculine and feminine
* Face what challenges you and seek to understand it before you attack it
* Ask what terrifies you to put on a different face. Please change this face for another.
Read Maxine Hong Kingston's novel The Woman Warrior: Memoirs of a Girlhood Among Ghosts and you'll find that ghosts are active in the lives of Chinese and Chinese Americans today.
A classic story in The Return of the Palace Lady genre is a story called “Teng Mu’s Drunken Excursion to the Jujing Gardens” in an early Ming collection "New Tales Told By Lamplight". The hero, the young poet Teng Mu, finds himself one moonlit night in the ruins of the old imperial gardens. He is inspired to compose a huaigu (a poem of longing) to express the feelings the scene arouses in him, However, a deceased palace lady suddenly materializes and delivers a poem of her own. They become lovers. Later she reveals that she once served in the palace of a Southern Song Emperor. After she died at twenty-two, she was buried beside the palace gardens. The imperial ruins are both her burial ground and the site of her former pleasures, which her ghost remembers and haunts. 
"Ghost" can mean many things, as dramatized in The Woman Warrior. The Chinese word gui was once used to refer to the nomads of the north who came from Mongolia to devastate the Chinese plains, a pejorative term later applied to the whites who colonized China from the 18th century.
According to an ancient Chinese glossary, the Erya, compiled around the third century BC, “ghost‟ (gui) means "to return" and "to die". When soul and body separate at death, each returns to its true place or nature:
A ghost means to return, that is,
to return to its true home, not to the "false" home to which the deceased clung
when still alive, but to his or her “true” origins elsewhere. A ghost is
therefore defined as what goes away and does not come back. 
The renowned Daoist physician Sun Simiao (581-682) identified the sources of disease and depression as gui who enter the body through thirteen Ghost Points with colorful names, including Ghost Pillow, Ghost Hall and Hiding Ghost. In his book Qianjin Yaofang (“Essential Formulas for Emergencies [Worth] a Thousand Pieces of Gold “) he declared that the Ghost Points should be watched "like milk on fire". If these points become weak, then spirits could settle there and sow disorder, overthrowing the virtuous balance of correct Qi. 
1. Judith T. Zeitlin, “The Return of the Palace Lady: The
Historical Ghost Story and Dynastic Fall” in in David Der-wei Wang and Shang Wei (eds), Dynastic
Crisis and Cultural Innovation from Late Ming to the Late Qing and Beyond (Cambridge
MNA and London, 2005: Harvard University Press) pp.151-199.
2. ibid p. 177
3. ibid p.154
4. Judith T. Zeitlin, The Phantom Heroine: Ghosts and Gender in Seventeenth-Century Chinese Literature (Honolulu: University of Hawaii Press, 2007) p.19.
5. Sun Simiao, Prescriptions d’acupuncture valant mille onces d’or trans. Catherine Despeux: (Paris: Guy Trédaniel, 1992).
Top: Hungry Female Ghost from the Kyoto Ghost Scrolls (12th century)
Lower: Zang Daqian (1899-1983), "The Reading Lady"
Bottom: The 13 Ghost Points of Sun Simiao (581-682)