Restaurateur Michelle Garnaut: ‘Shanghai won’t be the same at the end’

I dash through the rain and up the pathway to LockCha Tea House. As I shake off the first downpour of Hong Kong’s rainy season, I realise I have committed a cardinal sin: I have suggested a restaurant to one of the city’s most famous restaurateurs.

By the time a colleague had explained that a guest for Lunch with the FT picks the venue, it was too late to change the plan. Michelle Garnaut had never been to the combination tea house and vegetarian restaurant — a rare exception for the Australian who has catered to the Chinese and international elite, here and in Shanghai, for decades.

I step into the pristine colonial-era building, tucked away in a corner of Hong Kong Park, a few minutes’ walk from the Asia headquarters of HSBC and Standard Chartered. The calming thrum of a Chinese zither pumped in from ceiling speakers reverberates between the white plaster walls and dark hardwood beams.

Peering through an hourglass gateway, modelled after the dried gourd filters used in the Chinese tea ceremony, I find the only other patrons: a saffron-robed Buddhist monk speaking to an elderly couple at a nearby table, on which sits a black electric kettle. My waiter hands me a tea menu longer than my arm, listing dozens of varieties, from jasmine (HK$38, or $4.80, per pot) to the legendary “1950s Red Stamp” (HK$20,000).

Garnaut walks in and swishes off a black raincoat to reveal a green leather jacket over a black T-shirt and jeans. Topped off with a wide-brimmed felt hat, the outfit is somewhere between Diane Keaton in Annie Hall and Phoebe Buffay from Friends, but she’s making it work — as she has for more than 20 years running a centrepiece of Shanghai’s fine-dining scene.

If any restaurant in China had a claim to fame, it was Garnaut’s flagship venue M on the Bund. Opened in 1999, it was named for the waterfront promenade that rose to prominence as home to foreign banks and trading houses in the city’s 19th- and early 20th-century international concession. That pedigree earned it ignominy under Mao but, with the launch of Deng Xiaoping’s reforms, Shanghai’s historical role as a financial nexus made it the perfect candidate to showcase “capitalism with Chinese characteristics”. 

On the seventh floor of the landmark Nissin Building at the south end of the Bund, the restaurant offered a menu tailored to the tastes of Garnaut herself. It also had an unparalleled panorama of both the city’s old Art Deco district of Puxi (“west of the Huangpu”) and the futuristic skyline of Pudong (“east of the Huangpu”), home to the Shanghai Stock Exchange and some of the tallest buildings in the world.

“We were in exactly the right place at exactly the right time. China was opening to the world and we had that incredible terrace,” Garnaut says. “When we opened up the terrace, everybody would just immediately go and take photographs in front of the buildings on the Bund. But you know, from about 2010, nobody did that any more. Everybody went over to take pictures in front of Pudong.”

It’s one of countless changes that Garnaut has witnessed during her 38-year career in Hong Kong and China — one that earned the Melbourne native the Order of Australia from Canberra in 2018 for her distinguished services “to Australia-China relations as a restaurateur and entrepreneur”. The closing of M on the Bund and its sister bar, Glam, a few floors down marks the first time Garnaut has not been running a restaurant since 1989, when she opened M at the Fringe not too far from where we are seated.

As our tea arrives (two varieties of scented oolong), she marks down a long order of dim sum dishes in pencil, visibly delighted at the prospect of vegetarian abalone, vegetarian shark fin soup and vegetarian siu mai, a popular Hong Kong meat dumpling.

“Ooh this combo sounds weird, doesn’t it?” she says, pointing to a dumpling made partly from caterpillars infected and zombified by Cordyceps sinensis, a parasitic fungus found on the Tibetan plateau. Garnaut, who has worked with Cordyceps suppliers in western China and is curious how this will blend with the other ingredients, says: “We have to get it.”

There’ll be a bit of an exodus, I can tell you right now. I know a lot of people who are lining up [to leave]

As our waiter departs with our order, I ask Garnaut the same question she received from former Australian prime minister Malcolm Turnbull late last year when she announced that M on the Bund would close in February: what happened?

“The pandemic.” After two years of losses from China’s Covid-19 restrictions, which have kept out virtually all her international clientele, Garnaut’s lease was up for renewal. She had to choose between packing her bags or signing a five-year lease she couldn’t legally break without securing a replacement tenant first. The upshot, though, was that she escaped Shanghai as Chinese authorities kept the city of 26mn under a harsh lockdown that was still running when we met.

“It’s a shit time for Shanghai right now, and it won’t be the same at the end,” Garnaut says. Her friends and former staff there now spend their days glued to smartphone delivery apps to try to order food and other goods, all of which sell out as soon as supplies come back in stock. “There’ll be a bit of an exodus, I can tell you right now. I know a lot of people who are just lining up [to leave]. And I think that the idea that, you know, this might happen again is making people feel very weary.”

Shanghai’s near-shutdown could not have come at a worse time. While China had successfully contained most major outbreaks of Covid-19, the highly contagious Omicron variant slipped through the country’s net of quarantine procedures earlier this year and exposed the lack of progress in vaccinating vulnerable populations, such as the elderly. Rather than change course, Xi Jinping, who will seek an unprecedented third term in power later this year, has intensified his zero-Covid strategy, bringing Shanghai and a large part of the country’s economy to a virtual halt.

Yet even after her decision to leave, Garnaut — who refers to herself as a “Hong Kong girl” — has an obvious love for Shanghai. “It’s the alpha city of China,” she says, predicting that however the lockdown changes Shanghai, it will bounce back as it has many times before. After all, she had a hand in its last revival.

Garnaut was laughed at when she set out to open a fine-dining restaurant on the Bund in the late 1990s. Just to cook a proof-of-concept dinner for a small gathering of wealthy Shanghainese, she had to have a friend fly up from Hong Kong with a suitcase of ingredients she couldn’t get on the mainland. The response to the test meal convinced her there was a market. But she was only able to procure the seventh-floor terrace at the Nissin thanks to the second-in-command of the building’s landlord, who took a shine to Garnaut when she discovered they’d been born days apart in 1957, making them both “fire monkeys” according to the Chinese zodiac. “She said, ‘We are sisters,’ and that changed the whole relationship. After that, everything was possible.” 

That included embezzlement. While on holiday in Europe shortly after the launch of M on the Bund in 1999, Garnaut received an alarming call from Shanghai: “Michelle, I really think you’d better come back. Your landlord has been arrested for corruption.” With a payment of Rmb750,000 coming due on the building’s newly repaired elevator, Garnaut expected to be shut down and kicked off the premises. But then Shanghai’s high court stepped in and told her that, until she worked out a new lease, she’d be paying her rent to the court. She thought it best not to ask too many questions.

“I suppose it was probably really bad publicity,” she says, for the city’s only elite eatery to be shut down immediately after receiving attention from the local and international press. Shanghai was opening to the world and its government had a vested interest in maintaining that narrative. That was a canny bet, as M on the Bund marked the start of a fine-dining renaissance for the city.

Garnaut also attributes much of her success to a refusal to engage with the seedier side of doing business in China. “I knew from the beginning that I would not bribe anybody,” she says. She maintains that while this added substantially to her costs, it ensured her business could weather the corruption crackdowns launched by Xi and his predecessors, which have undone the life’s work of anyone caught in the dragnets.

Our dishes arrive in quick succession and soon the table is covered with far more than we can eat. “Come on, you try some of this, which is I guess . . . mushroom?” she says, plopping a fake abalone on to my plate. “And I’ll try this, which is . . . well, come on, let’s be brave.”

I like the feeling of a restaurant . . . you’re working with people at their best, and it’s like theatre. Every lunch, every dinner, it’s a new production

I pick up the faux abalone with my chopsticks: the shape and smell are perfect but it lacks the gooey amber sheen typical of Cantonese cuisine. I pop the medallion into my mouth, and it’s chewy and sickly sweet just like the real thing. I hate it, and so does Garnaut, but we both acknowledge it’s a fine facsimile. Garnaut begins shovelling more on to my plate. Am I being mothered?

“I mean, I’m kind of mothering,” she says, “which is fine. I’m in the restaurant business — it’s about hospitality.” Her own mother hated cooking, which often left her to handle meals for eight younger siblings while growing up in Melbourne. Her grandmother, a more willing chef, would “just cook the shit out of everything”, judging the cooking time for each dish based on the number of cigarettes she’d finished.

Garnaut’s own entry into hospitality came during her teenage years as a waitress at a local Jewish restaurant. “When I finished school, I got a scholarship to go to university and my grandparents asked, ‘What do you want to do?’ And I said, ‘Well, I want to be a waitress.’ And they’re like, ‘Don’t be ridiculous!’” she says. “But I like the feeling of a restaurant . . . you’re working with people at their best, and it’s like theatre. Every lunch, every dinner, it’s a new production.” 

In 2003, her cultural ambitions led her to start the Shanghai International Literary Festival, which has played host to talents ranging from Simpsons creator Matt Groening to authors Amy Tan and Pico Iyer. Gore Vidal headlined the festival’s inaugural year and was, Garnaut says, “a complete asshole” on landing at Shanghai International Airport. “He told me: ‘My dear, when I travelled to Cuba the president came to greet me at the airport.’ And I told him: ‘I think [President] Hu Jintao is at the airport today, but he’s not here for you.’”

During her entire career in China there was only one time when Garnaut obviously crossed the line. She had just opened Capital M, her third fine-dining restaurant, smack in the middle of Beijing, with a view of Tiananmen Square. Throwing herself into the city’s cultural scene with characteristic zeal, Garnaut had expanded the literary festival to Beijing and invited British historian Timothy Garton Ash to give a talk on free speech just as members of the nearby rubber-stamp legislature gathered for an annual meeting. Days before Garton Ash’s session, she was attending another talk on the restaurant’s second floor when a knock came at the door. Suddenly, her assistant appeared at the top of the stairwell and told her there were men downstairs in the lobby — government men — and they looked upset. “They want to see you,” he said.

Soon the two found themselves in the middle of a room packed with dozens of officials from Beijing’s security services. “‘Why do you have to do this?’ they asked me,” she recalls, putting on her best impression of an apparatchik’s growl. “They pissed around for a while and eventually mentioned the talk” — not the one on free speech, but instead a separate panel on the environment, which had become a sensitive issue thanks to Beijing’s dangerously haze-choked air.

“They yelled at me: ‘If anything goes wrong, you’re going to be held responsible!’” But when she asked if she should cancel the talk, they were emphatic: “We didn’t ask you to cancel it!”

“I cancelled the talk, of course,” she says, and wonders aloud why the session on free speech had not triggered any totalitarian tripwires. It is precisely the sort of lingering question, the kind of authoritarian overhang, that will be all too familiar to many who have done business in China, and which has become more prevalent during the past decade under President Xi.

In the end, Beijing proved too much for Garnaut. Capital M was just down the lane from the Great Hall of the People, as well as Zhongnanhai, the compound where the party’s actual leadership hashes out national policy and politics. Even practice parades meant shutting down the restaurant during peak weekend hours or closing off the terrace. When Garnaut complained to officials about how bad losing the terrace view was for business, they pointed to the little dots perched on the roofs of some buildings on the square and explained: “People can’t go outside. There are snipers.” 

Our dessert finally arrives: soft grey custard buns topped with gold flakes and filled with grainy sweet sesame paste. Garnaut’s enthusiasm for the meal has cooled along with our dishes, and the buns don’t change her mind. “It’s really mediocre dim sum, which is a shame, because I love dim sum . . . Can I say that?” I assure her she can, and ask if she thinks China will keep closing in on itself — and whether Shanghai will ever be as open as it was before the pandemic.

She thinks for a moment and estimates that the city reached its most recent cosmopolitan peak around 2010. “The Xi Jinping era is much more conservative, it’s much more closed down, it’s much more nationalistic.” On the other hand, she says, many of the people she met when visiting Shanghai for the first time were already complaining that the city was past its prime.

“It’s just that sort of generation before yours. They’re all always carrying on about how they had the golden years, and China was much more interesting for them in their time than it ever could be for you in your time.” And she does still love China, even if that sentiment is increasingly unpopular among politicians in her native Australia, who paint the country and its populace as a rising authoritarian menace.

Yet Garnaut doesn’t think anyone can say with certainty how things will turn out when Shanghai fully leaves lockdown and China finally puts the pandemic behind it. “You never really know what’s going on in China, or what’s happened behind the scenes. But I personally think everything is up in the air right now,” she says. “And it’s nothing but a gut instinct, but I think it could go any way.” 

Hudson Lockett is the FT’s Asia capital markets correspondent

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