The invention relates to a Chinese medicine for treating chronic cough with asthma disease and acute attack of cough with asthma and a preparation method thereof. The medicine adopts prepared pinellia tuber, saffron, ginger, rhizoma bletillae, bergamot, glycyrrhiza, perilla leaf, mint, citron, dried tangerine peel, red ginseng, west ginseng, villosum, ligaloes, clove, cardamom, cinnamon and calcined haematitum as raw materials which are prepared into an extractum by damp-heat sterilization, crushing, screening, heat reflux extraction, decoction and concentration; moderate amount of starch is added into the extractum to prepare grains; and the Chinese medicine capsule is obtained by filling the grains into a hollow capsule. The invention can achieve better efficacy as the medicine can effectively dissipate phlegm, suppress cough and relieve dyspnea by the compatibility of prepared pinellia tuber, Chinese medicine, for drying damp and eliminating phlegm and red ginseng for replenishing vitality and relieving depletion and other medicines for regulating qi and strengthening spleen, supplementing the body fluid and relieving cough, benefiting lung and nourishing yin, and the like. The medicine is oral administration, thus having convenient use, exact effect and small toxicity and side effects. The Chinese medicine also has the advantages of rich source of raw materials, simple production method and low cost.