Say I want to learn to speak Chinese. Could it be possible to learn Chinese just by watching subtitled Chinese movies/tv and reading books made for children?
The short answer is, yes. You could learn (to comprehend) a language just by being exposed to media and books.
The longer answer is, yes, but...
Books (and other language learning kits) provide a basis for language comprehension. They have rules and exercises to test your grammar and other non-interactive linguistic devices. However, this is a very limited scope of language and trains you only to that particular author's style and literary interpretation.
Media (movies, tv, music, &c.) add more for your understanding of a language, but is still one directional (the movies can not verify if what you heard was correct or not) and tends to be very informal and slurred.
In your example of Chinese (which I speak), many characters have the same pronunciation which can lead to written passages that make sense when written, but not spoken (see the famous Lion Eating Poet in the Stone Den Poem for an example). In spoken, colloquial Chinese, many people will draw characters on their hands or give a phrase where the character occurs to clarify the spoken meaning. These may or may not be presented in books and media.
There are also the non-verbal linguistic cues (body language) that cannot be fully communicated in writing. For example, in Chinese, rather than say "death" or that someone "passed", many people (especially the older generation) will just stop speaking and curl their index finger in front of you to indicated that someone has died.
With all of this said, books and media provide a good foundation for comprehension, but true fluency is improbable with just those resources.
It depends on the language, but for most languages, not completely.
Especially with a language such as Chinese and Japanese, which has many complex features, you need to get a good learning book for the grammar and you need to get support for learning the pronunciation properly. The pronunciation is quite important in Chinese, since pronouncing a character a bit differently can result in a radically different meaning. Also, when just listening to movies and reading books, you won't see the Pin Yin system, which is very useful.
For languages such as English and French, it would also be hard to completely master the verbs and tenses, since there are lots of forms and they are already hard with good explanation.
Also, you must make sure that you are not learning a dialect. This can be especially harmful when you are learning two completely different dialects and mix them up. That will also be confusing for the learner.
This is a purely anecdotal answer.
The first time I travelled to Romania a few years ago I made a local friend who was quite surprised to find that he was able to speak English. He'd never studied it at school or in self-study, and said he must've picked it up by watching the Cartoon Network as a kid! He's never been to an English speaking country. I'm not sure he's been out of Romania.
I think he's in his early-to-mid forties. He has a typical Romanian accent, not heavy, everyone can understand him. We can converse on just about any topic. He doesn't have to ponder before speaking, he's fluent.
I'm sure others I met on that trip also claimed they learned English from watching TV.
This surely won't work for arbitrary language pairs. A lot of "big words" in English have Romance origins in common with Romanian and this must be a big help. It will surely also work best when learning as a child.
At least it very much depend on your definition of learning.
Being exposed to media and books, you'll get more familiar with the sound of a language, and get to learn a few words. Even more words, if you persist for some time. However, grammar isn't something to be picked on the flight.
So sure, you'll be able to communicate given enough time. But you'll stop where a higher proficiency is required. A structure studying of grammar is really necessary at some point of a language learning process.