1. Background
The ancient Chinese astronomers called the five major planets by the names of the Five Elements. Venus is Metal (gold); Jupiter is Wood; Mercury is Water; Mars is Fire; Saturn is Earth. The position of the five planets, the sun, the moon and comets in the sky and the Chinese zodiac sign at the time a person was born determine the destiny of a person's life according to the Chinese astrology.
2. Chinese zodiac
The twelve zodiac animal signs ( 生肖 shengxiao) are, in order, the rat, ox, tiger, rabbit, dragon, snake, horse, sheep (or goat), monkey, rooster, dog, and pig. Legend has it that the rat was given the task to invite the animals to report to the Jade Emperor to be selected for the zodiac signs. The cat was a good friend of the rat, but the rat forgot to invite him. So the cat vowed to be the rat's natural enemy for ages to come. Interestingly the cat -- but not the rabbit -- does make the Vietnamese Zodiac (see below).
There is also a cycle of the Five Elements (Wood, Fire, Earth, Metal(Gold), Water) on top of the cycle of animals. A person's year sign can be a gold dragon, a wood rooster etc. In ancient match-making practice in China, couples were brought together according to their compatible signs. For example, it is believed that dog and dog don't get along, but dog and pig do; a water dog supports a wood pig but dominates a fire pig in their relationship because water benefits wood, but controls fire according to the Chinese five elements' interaction.
The elements are also associated with colours, the traditional correspondence being green to Wood, red to Fire, brown to Earth, white to Metal, and black to Water.
The elements are combined with the binary Yin Yang cycle, which enlarges the element cyle to a cycle of ten. Even years are yang, odd years are yin. Since the zodiac animal cycle of 12 is divisible by two, every zodiac can only occur in either yin or yang: the dragon is always yang, the snake is always yin, etc. This combination creates a 60-year cycle, starting with Wood Rat and ending with Water Pig. The current cycle began in the year 1984. Since the (traditional) Chinese zodiac follows the lunisolar (Chinese calendar), the switch over date for the zodiac signs is the Lunar New Year, not January 1 as in the Gregorian calendar.
The Chinese zodiac signs are used by cultures other than Chinese also. For one example, they often appear on Japanese New Year's cards. The United States Postal Service and those of several other countries issue a "Year of the ???" postage stamp each year to honor this Chinese heritage.
There are several stories as to how the twelve animals of the Chinese zodiac were chosen. In one, the Jade Emperor, although having ruled Heaven and Earth justly and wisely for many years, had never had the time to actually visit the Earth personally. He grew curious as to what the creatures of the earth looked like. To this end, he charged his chief advisor with selecting the twelve most interesting animals and bringing them to Heaven to satisfy his curiosity.
The Emperor's advisor sent invitations to the rat, the cat, the ox, the tiger, the rabbit, the dragon, the snake, the horse, the ram, the monkey, the chicken, and the dog. The cat, the most handsome of all animals, asked his friend the rat to wake him on the day they were to go to Heaven so he wouldn't oversleep. The rat, however, was worried that he would seem ugly compared to the cat, so he didn't wake the cat. Consequently, the cat missed the meeting with the Jade Emperor and was replaced by the pig. The Jade Emperor was delighted with the animals and so decided to divide the year up amongst them. When the cat learned of what had happened, he was furious with the rat and that, according to the story, is why cats and rats are enemies to this day.
