That seems like the entire point: China's firewall tries to create a Chinese internet consisting of people in China browsing sites in China. The internet doesn't work that way. While sites with country-specific audiences do exist, for the most part everyone browses the same Internet. Sites like Baidu, Youku (a YouTube clone), Weibo (a Twitter clone), and other sites hosted in China benefit greatly from the firewall. Without the firewall, those sites would still have an audience, but they'd compete heavily with the much larger audiences on the sites they cloned.
There are multiple facets to the GWF's raison d'être. Most touched on in this thread. One area not given much voice is China's desire to handle legal issues in its domain. If you want a web site in China, you have to have a person (usually through a company) that is the agent responsible for the site. This person must be a Chinese national. That person is the one that has to show up in court if the site/company gets sued. If China is serious about nurturing its legal system, its a perfectly valid approach that parties conducting business in China be required to answer to the legal system when required. This means that if Facebook wants to serve up to Chinese people, they need a Chinese company and agree to be subject to Chinese law for what they serve up in China. Many may not agree with the restrictions on what you can serve up, but this is a different aspect of the GWF.
I don't consider that a "perfectly valid approach". It precisely matches what the US wants to do with SOPA: regulate foreign sites in absentia and block them if they don't comply.
