Flag of the Young Pioneers of China.
This is a large detachment flag of the Communist Chinese co-ed youth organization, the Young Pioneers of China (YPC), which is operated by the Communist Youth League (CYL), the organization of older youth under the direct supervision of the Chinese Communist Party (CCP). The YPC is a pioneer movement similar to youth organizations in other communist nations, which had banned traditional Scouting (as inspired by Baden-Powell's scouting movement) in many nations after WWII.
The Youth and Children of China Movement were formalized after WWI and renamed the YPC in 1953. After its creation in the 1920s, the CCP founded and ran other youth movements in communist controlled areas.
During the Cultural Revolution (1966-1978), the YPM was made defunct. It was replaced by the Little Red Guards; younger counterparts of the Red Guards. In October 1978, after the Cultural Revolution, the YPM movement was reinstated.
Young Pioneers are children between six and fourteen years of age. Upon reaching the age of fourteen, members may exit the Young Pioneers to join the CYL. Most elementary school students are Young Pioneers when graduating.
The Young Pioneers Constitution clarifies the flags' symbolism: The flag is red, which symbolizes the victory of the Chinese Communist Revolution; the five-pointed golden yellow symbolizes the leadership of the Communist Party, and the flaming torch symbolizes the brightness of a future that follows the path of international communism.
Small YPC detachments use the same flag except they are swallow-tailed.
Curiously, the cessation of the United Kingdom and Portugal as the colonial masters of Hong Kong, in 1997, and Macau, in 1999, respectively, has not seen the expansion of CCP youth organizations including the YPC, into those areas..
The Chinese writing imprinted on the hoist is a Postal stamp cancellation for registered mail. See also ZFC1327.
ZFC Noteworthy Flag
Sources
Young Pioneers of China, Wikipedia, May 29, 2012, From: http://en.wikipedia.org/wiki/Young_Pioneers_of_China
Young Pioneers Day in China, TravelPod, May 29, 2012, From: http://blog.travelpod.com/travel-blog-entries/eddakath/life_in_china/1192287360/tpod.html
Young Pioneers, Hitler Youth & Boy Scouts, Edward Bellamy, Francis Bellamy, Pledge of Allegiance, May 29, 2012, From: http://rexcurry.net/ussr-cccp-sssr-young-pioneers-socialism.html