huit

Having met a number of gwai-lo's who have lived in China for many years, some over 10 years in my line of work (I travel to China from Australia 2-3 times a year), I would say that you definitely do not need to learn the language to understand the culture. Most of them don't speak Chinese beyond ordering food or a "PI JIU!!!", but all of them are very good at pretending to be the "dumb Westerner" and have a very good idea of how the Chinese operate - you have to to survive in China.

So yes, just like anything else, having textbook knowledge, in this case, knowing the language, while it puts you in good stead, you'd still have to immerse yourself in it to be able to claim you know the culture, because it's continually evolving.