Traditional Chinese calendar is built with both lunar and solar cycles in mind. Months reflect moon cycles, with a 13th month added approximately every three years to take account of disprency between solar and lunar cycles (If we take lunar cycles only into account, the result would be like Islamic calendar which is useless for agricultural purposes - all special days (not holidays) in Chinese calendars are based on weathers.
Years are usually formed with a 60 year cycle with a combination of two words. In conjunction traditional year name of the emperor is also used with the year name (so we will say Fifth year of blah blah blah, year blah blah in traditional Chinese calendar). Since 1912 with the successful Revolution overthrowing the Qing dynasty and the proclaimation of the Republic of China, China has formally been on Gregorian calendar (except that very often year names were written in xth year of the ROC. This practice has effectively ended with the Communist People's Republic of China in power). However, the old calendar's new year day is still a formally recognized statuatory holiday in China.