In Traditional Chinese Medicine (TCM), He Huan Hua belongs to the 'Herbs that anchor and calm the Spirit' category. These herbs are substances that tranquilize the Mind and treat symptoms such as restlessness, palpitations, anxiety or insomnia. They tend to have sedative properties by weighing the Qi downwards and should generally be used for a limited time only.
Furthermore He Huan Hua is Neutral in nature. This means that He Huan Hua typically doesn't affect the balance in your body. Balance between Yin and Yang is a key health concept in TCM. Eating too many "Hot" (Yang) ingredients can lead to an imbalance whereby one has a Yang Excess. The inverse is true as well: too many "Cold" (Yin) ingredients can lead to a Yin Excess. The Neutral nature of He Huan Hua means that you don't have to worry about that!
He Huan Hua also tastes Sweet. 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. Sweet ingredients like He Huan Hua tends to slow down acute reactions and detoxify the body. They also have a tonic effect because they replenish Qi and Blood.
The tastes of ingredients in TCM also determine what Organs and Meridians they target. As such He Huan Hua is thought to target the Heart and the Liver. In addition to regulating Blood flow, in TCM the Heart is believed to be the store of the 'Mind' which basically refers to someone's vitality. The Liver on the other hand 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.