In Traditional Chinese Medicine (TCM), Xuan Fu Hua belongs to the 'Warm herbs that transform Phlegm and stop Cough' category. In TCM Phlegm is a condition of Stagnation of Fluids which tends to start in the Spleen and then goes to the Lungs. If this overly accumulates it thickens and becomes pathological Phlegm. Phlegm, being a form of Stagnation, often starts as being Cool and transforms to Hot as the condition progresses. The herbs in this category are Warm in nature so they treat the early stages of the Stagnation: Cold-Phlegm and Wet-Phlegm with symptoms of wheezing, vomiting and nausea.

As suggested by its category Xuan Fu Hua is Warm in nature. This means that Xuan Fu Hua tends to help people who have too much 'Cold' in their body, although with less effect than a plant that would be Hot in nature. Balance between Yin and Yang is a key health concept in TCM. Those who have too much Cold in their body are said to either have a Yin Excess (because Yin is Cold in nature) or a Yang Deficiency (Yang is Hot in Nature). Depending on your condition Xuan Fu Hua can help restore a harmonious balance between Yin and Yang.

Xuan Fu Hua also tastes Bitter and Pungent. The so-called 'Five Phases' theory in Chinese Medicine states that the taste of TCM ingredients is a key determinant of their action in the body. Bitter ingredients like Xuan Fu Hua tends to have a cleansing action on the body by clearing Heat, drying Dampness and promoting elimination via urination or bowel movements. On the other hand Pungent ingredients tend to promote the circulations of Qi and Body Fluids. That's why for instance someone tends to sweat a lot when they eat spicy/pungent food.

The tastes of ingredients in TCM also determine what Organs and Meridians they target. As such Xuan Fu Hua is thought to target the Spleen, the Stomach, the Large intestine, the Liver and the Lung. In TCM the Spleen assists with digestion, Blood coagulation and Fluids metabolism in the body. The Stomach on the other hand is responsible for receiving and ripening ingested food and fluids. It is also tasked with descending the digested elements downwards to the Small Intestine. The Large Intestine receives the "impure" parts of the digested food from the Small Intestine, absorbs the remaining fluids and excrete the remainder as feces. The Liver is often referred as the body's "general" because it is in charge of regulating the movements of Qi and the Body Fluids. It also takes a leading role in balancing our emotions. In addition to performing respiration, the Lungs are thought in TCM to be a key part of the production chain for Qi and the Body Fluids that nourish the body.