Hotei or Budai or Pu-tai, as is known in different cultures, is a deity in Chinese folklore. His image is based on a Zen monk who lived about 1000 years ago in China during the later Liang Dynasty and was known for his kindness and loving nature. Hotei is also seen as a reincarnation of Maitreya ot the Future Buddha because of his nature and also because of a chant that he uttered before his death.

Maitreya, the true Maitreya
has billions of incarnations.
Often he is shown to people at the time;
other times they do not recognize him.

Hotei is very important in Feng Shui and is seen as benefitting business as well as family. It is best places in the West part of the room and never in bathrooms as this this a sign of bad luck.

Image
The general image of Budai is that of a fat bald man with a pot belly wearing a robe in Chinese style and carrying or wearing prayer beads. He carries a begging bowl, indicating his Buddhist nature and life. He is also always seen with a cloth or linen sack which hold his few possesions and items like candy for children, rice plants signifying wealth and abundance, and worries and sadness of people.
Budai is popularly known as Laughing Buddha or Fat Buddha in the West because of this image.

Significance
His image is a picture of abundance. He signifies Buddhist values of contentment, generosity, kindness and love. He is frequenly depicted with children and is known to take away sadness from people.

He is seen as a patron of the poor, weak and children. He is also considered to be the patron saint of restauranteurs , bartenders and fortune tellers.

Chinese I Kuan Tao shrines have Budai as a central figure and stands for contentment, generosity, wisdom and kindheartedness.

Confusions
Budai is sometimes confused with Angida Arhat, who is one of the 18 Buddhist Arhats, and Phra Sangkachai, a revered Thai monk because of similarities in their depictions and qualities attributed.

It is apparent that the Buddhist perspective of morality in the Sangha is been underlined in the Vinaya Pitaka.

The basic perspective of Buddhist morality can be best understood from the Pali verse:

Sabba papassa akaranam – kusalassa upasampada
sachitta pariyodapanam – etam buddhanu sasanam

The translation of this verse goes like this: "to keep away from all evil, cultivate good, and purify one's mind is the advice of all Buddhas.

The Panch Shila

For this, the Buddha is said to have underlined five basic percepts of morality which the Buddhist sangha should adhere. These percepts are also known as the Panch Shila which advises his followers to avoid killing or harming any living things; avoid stealing or taking away what is not rightfully their possession, avoid sexual misconducts which for monks and nuns meant celibacy, avoid lying or uttering any hurtful speech, and to avoid intoxicants which would diminish clarity of consciousness.

These precepts are all about abstinences from harmful activities which would help in nurturing and fostering an attitude of kindness and consideration for all living beings. Among three of the Noble Eightfold Path as instructed by the Buddha's, instructions to have a Right Speech, Right Action, and Right Livelihood underlines the moral principles of the five percepts.

Since the Buddhist law of kamma states that one's moral actions, whether good or ill, affects the cycle of life, and is determined by present deeds, a Buddhist is expected to adhere to these principles in order to be free from the cycles of rebirth.
Both loving-kindness (metta) and compassion (karuna) underpin our moral actions. The logical culmination of the moral percepts is the inculcation of compassion and kindness in the hearts of the Buddhists. Along with this comes the ability to have wisdom and concentration – sila, samadhi, panna.

To the five existing moral percepts, the monks and nuns in the succeeding development of Buddhism are believed to have added five more rules – to have one simple meal a day, before noon; to avoid frivolous entertainments; to avoid self-adornment; to use a simple bed and seat; and to avoid the use of money. Buddhists believe that following these guiding principles can prevent further sufferings.