The colours are based upon Eastern Cosmology as East is associated with the mythical Azure Dragon. In this case an azure pile points in the modern conventional 'Eastern Direction' as does the yellow star. Black appears on the top and red on the bottom.
As blue represents the East, black represents North and red represents South in Eastern Cosmology. Absent from the flag is the colour white which is associated with the West. Since East is diametrically opposed to West, it is not included in the this flag. Likewise in the flag for the Western Hemisphere blue is concurrently left out.
A flag for the Eastern Hemisphere to be flown anywhere in the Eastern Hemisphere. It can be flown by a wholly mathematical criteria, in between the Prime Meridian and 180th Omega Meridian, or with a cultural geographic axis - anywhere on the Eastern Old World Hemisphere: Africa, Asia, or Europe.
Photo Credit :http://gistlabs.net/Dragon_Forest/dean.htm