Venerable Yin-shun had some criticism on Chinese Buddhism. The dimension, aim and meaning of his criticism deserve a deep discussion. Yin-shun has been thought as the one holding a negative attitude towards Chinese Buddhism from the viewpoint of Indian Buddhism, and has been criticized from the Chinese Buddhist circle for a long time. In this article, we discuss Yin-shun's thoughts of Chinese Buddhism to show his true attitude and ideas. He thoroughly viewed the ways in which the ancient Chinese Buddhist Scholars absorbed the theories of Indian Buddhist texts and developed their own teaching systems. Yin-shun appreciated the scholastic schools of Tien-Tai and Hua-Yen for the combining of theory and practice He confirmed these two schools' efforts to adapt themselve to Chinese culture and developed synthesized systems of Buddhist thought which could be harmonized with Indian Buddhist theories. As for the Chan School, although they paid attention to meditation practice and neglected reading texts, but they had a kind of deep experience which does not deviated from Buddha's teachings. Yin-shun made a list of Buddhist canons to be read for Buddhist students in which both Indian and Chinese texts are included. In fact, he had a very high opinion of Chinese Buddhism. Chinese Buddhist inclinations towards easy way and practice derived a narrow horizon and caused the decline of Buddhism. Having realized the thoughts of Buddhist texts deeply and thoroughly, and having had a good understanding of Chinese Buddhism, due to his concern for the promotion of Chinese Buddhism, Yin-shun pointed out the matters concerning its decline, such as perfect hamonization, true etermity, resorting to outer power, mystery. He critisized with the spirit of being objective, and his opinions are well-meaning advices which should be understood in the full context of his works.