Joseph Needham, in the second volume of his masterpiece, Science and Civilization in China, makes a great effort to promote the thought of the ancient Yin-yang School. He believes that, in contrast to the subordinative and causal mode of thinking in the West, the Chinese way of thinking in this period is correlative and associative. He also recognizes that the thinkers of the Yin-yang School, especially of the Han Dynasty, are naturalists in terms of organism. His view is that, through the conceptual scheme of yin-yang and wu-xing (five powers or agents), these thinkers (a) understand tian (heaven) and ren (human beings) as an organic whole; (b) claim that there is a correspondence in terms of gan-ying (mutual understanding) between heaven, earth, and all things, on the one hand, and human beings, on the other; and (c) maintain that there is natural order exhibited in between. Needham believes that this organism or naturalism can provide some kind of proto-scientific discourse and make a contribution to the development of science and technology in China. The aim of this paper is first of all to analyze the arguments of Needham? view. I discuss both the heuristic and exaggerated portions of his view and examine the discourses using conceptual schemes of yin-yang and wu-xing and the view of qi-emergence in ancient China. I show that, although this kind of operation of ideas has generalizations based on limited empirical phenomena, most of these ideas are speculative and not based on empirical ground and thus cannot be recognized as either standard or alternative science. Finally, in the last section, I demonstrate the inaccuracy of Needham's interpretation of Daoist thought and show that Daoist thought is fundamentally unscientific and thus should not be labeled as "naturalism"