The invention relates to an externally applied traditional Chinese medicine composition for treating umbilical hernia and an umbilical hernia treating bag containing lychee seed and rhizoma cimicifugae. The traditional Chinese medicine composition is prepared from radix astragali, angelica, bighead atractylodes rhizome, rhizoma cimicifugae, radix bupleuri, dried orange peel, toosendan fruit, Evodia rutaecarpa, lychee seed, fennel, clove, asarum, safflower and the like. The umbilical hernia treating bag comprises a bellyband body and fastening belts, wherein the inner side of the bellyband body is provided with a square or circular inner bag, and a medicine core pad containing the traditional Chinese medicine composition is filled in the inner bag. In the invention, traditional Chinese medicines with the functions of tonifying middle-Jiao and qi, soothing the liver and strengthening the spleen are used for umbilical skin absorption and physical support for treating infantile umbilical hernia. By utilizing the externally applied traditional Chinese medicine composition, the defect of long treatment course in self-recovery and conservative treatment of umbilical hernia and the defect that the sick children can feel painful in the operative treatment are solved. The invention has the characteristics of obvious curative effect and short treatment course, and the patients can not feel painful and have no skin irritation symptom or anaphylaxis. The invention is suitable for children with tender viscera, is also suitable for clinical features of children, and can promote the children with umbilical hernia to grow up healthily. The raw materials in the prescription are conventional traditional Chinese medicines, thus, the invention has the advantages of wide raw material sources, low cost and simple technique, and is easy for popularization.