In Traditional Chinese Medicine (TCM), Chi Shao belongs to the 'Herbs that invigorate the Blood' category. Like the name indicates these herbs tend to stimulate the Blood flow. In TCM they're used to help the circulation of Blood in cardiovascular conditions or menstrual irregularities as well as to treat acute pains caused by Blood Stagnation. They can also be used to treat Blood Stagnation when it causes certain tumors, cysts and hardened clots.
Furthermore Chi Shao is Cool in nature. This means that Chi Shao tends to help people who have too much 'Heat' in their body, although with less effect than a plant that would be Cold in nature. Balance between Yin and Yang is a key health concept in TCM. Those who have too much Heat in their body are said to either have a Yang Excess (because Yang is Hot in nature) or a Yin deficiency (Yin is Cold in Nature). Depending on your condition Chi Shao can help restore a harmonious balance between Yin and Yang.
Chi Shao also tastes Bitter. 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 Chi Shao tends to have a cleansing action on the body by clearing Heat, drying Dampness and promoting elimination via urination or bowel movements.
The tastes of ingredients in TCM also determine what Organs and Meridians they target. As such Chi Shao is thought to target the Liver. In TCM 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.