This paper focuses on parsing processes and principles, which are essential tasks for machines to understand syntactic and semantic structures of a sentence. Machine analysis procedures for Chinese sentences, including word segmentation, and part-of-speech tagging and parsing, were visually represented using Cparser, a rule-based constituency parser developed by Peking University. Then we explained how linguistic knowledge was embodied in Cparser lexical, syntactic and semantic components, and discussed their complex interplay that allows automatic parsing. As a practical example, a Chinese textbook treebank is also constructed using Cparser. According to the theoretical and practical discussion in this paper, Peking University Cparser can easily to reflect and modify undated linguistic knowledge and is expected to be widely used as an analysis and verification tool for Chinese grammar research.