For Comp Lit, usually they expect one language excluding your native language to a high degree of fluency, i.e. capacity to carry out advanced postgrad work in. In your case you native language is Chinese, and yes they do normally accept English as as your "foreign language" if it's not your native language. But most of the top programmes want, or at least strongly recommend, a second foreign language, at a somewhat lower, but still quite high, level, usually termed "reading knowledge". Reading knowledge means that you can read with relative ease in the language with the help of a dictionary (if you are looking up every second word however that isn't a proper reading knowledge!). So no it doesn't mean that you can read Don Quixote or Montaigne without any help from a dictionary; that level is fluency or near-fluency. And normally you'll need to learn a third foreign language (often has to be ancient or non-Indo-European) over the course of your postgrad studies (but not for admission).
Hope that helps. Good luck!