Actually, I need to point out that decades of research on phonological awareness (of which phonics is a component) in reading has pretty clearly established that all fluent readers of phonetic languages use phonological skills in reading. Development is slightly different in transparent or near-transparent (translucent?) languages, such as Finnish or Spanish, than in creoles like English, but the general principles appear to generalize across phonetic languages.
The critical difference is that ~70-75% of kids pick up the necessary phonological processing skills regardless of the type or presence of reading instruction they receive. Even if you think you don't read phonetically, you use phonological processes to read; they just aren't routinely exposed unless you encounter novel vocabulary. The remaining 25-30% of people need explicit instruction in at least some component of phonological processing to become fluent readers (some need only a few extra exposures, which is why practice helps).
And, as a side note, it is not true that written Chinese has absolutely no phonetic basis. While it is true that the language is primarily ideographic/pictographic in nature, some of the radicals are sound radicals, or can be used as sound radicals, which give some indication of the phonemes to be used in pronouncing the characters. There is also a native phonetic system (bopomofo) used in a number of Chinese-speaking (by which I mean Mandarin) regions of the world (but mostly Taiwan, ROC) to cue young children as they are learning to read. The romanized pinyin system is used somewhat similarly in the PRC.
Good points! It seems that many kids here can intuit these principles, or only require minimal instruction. But this is not the case for most kids. It's really amazing to see DS "just know" how to read, when for years I've watched NT kids muddle through the "process" in the classroom.
