The Australian government’s recent rejection of Archer Daniels Midland Co’s (NYSE: ADM) AUD3.2 billion bid to acquire GrainCorp Ltd (ASX: GNC, OTC: GRCLF) has left some skeptics wondering whether Australia truly is open for business again, as Prime Minister Tony Abbott declared upon prevailing in the country’s recent federal election.

That’s not unreasonable considering that the decision, which took many investors by surprise, came little more than two months after the Liberal-National Coalition’s ascent to power. It also creates a potentially difficult precedent for a number of other pending investments by foreign-owned companies, particularly bids by some of China’s state-owned companies.

Although Treasurer Joe Hockey said the government’s decision to scuttle the deal was based on the fact that the grain industry is still in a transitional phase since its 2008 deregulation, it’s hard to dismiss politics as the culprit. The rural-based National cohort of the Coalition was strongly opposed to the deal, and though Mr. Hockey had previously stated he would not be “bullied” into his decision, when it comes to politics it’s hard to assume that isn’t what ultimately happened.

Even so, Australia’s new government is aggressively pursuing the repeal of both the carbon tax and the Minerals Resource Rent Tax (MRRT), which should help steady the country’s all-important resource sector. And the government has also been pushing for long-stalled bilateral free-trade agreements with regional peers, such as China, Japan and South Korea. As such, it’s too soon to dismiss the Coalition’s business bona fides, except in those instances where intra-party politics will likely take precedence.

In the meantime, it’s worth pondering how the government’s spurning of ADM could affect some of the other deals before its Foreign Investment Review Board (FIRB), which has initial oversight on each bid before the treasurer’s final decision. That’s because a high-profile rejection of a Chinese acquisition would likely stymie the government’s effort to negotiate a free-trade agreement with China, which Mr. Abbott has said he hoped would be in place within 12 months.

For now, it appears the government has taken a pragmatic approach toward relations with its largest trading partner, by relaxing restrictions on state-owned Yanzhou Coal Mining Co’s (NYSE: YZC, Hong Kong: 1171) stake in its Australian subsidiary Yancoal Australia Ltd (ASX: YAL). As a condition for approving its AUD3.3 billion acquisition of Felix Resources Ltd back in 2009, Yanzhou had agreed to list its Australian-domiciled assets on the ASX, which it did via Yancoal, and eventually pare its holdings in this entity to 70 percent of shares outstanding.

But Yanzhou currently owns 78 percent of Yancoal, which would have required it to find a buyer for a portion of its stake at a time when coal prices remain depressed. As such, it petitioned the FIRB to remove the restriction and allow it to purchase the balance of shares it didn’t already own. Earlier this week, Mr. Hockey agreed to lift the restriction, while stating the government had no “in-principle objection” to Yanzhou eventually increasing its stake to 100 percent.

The treasurer was careful to note that, unlike the ADM deal, the government did not view this arrangement as contrary to the national interest and reiterated that similar deals involving foreign investors would be approved as long as they fulfilled this criterion.

Still, the new government will have to establish more of a track record in this area to remove uncertainty in the wake of its decision on ADM. For instance, Mr. Abbott has also said that he prefers investments from foreign companies that promise to build enterprises and create jobs rather than simply acquire existing companies.

At the same time, Mr. Hockey may have undermined the FIRB’s negotiating power by showing that any agreements with the regulator can always be renegotiated at a later juncture, especially if they involve companies from Australia’s largest trading partner.

But the bottom line is that we still believe Australia is indeed open for business again, though politics will occasionally intervene.