Daewoo moved into the construction industry, helping to make the new village movement, which was a part of Korea's rural development program. The corporation was also able to take advantage of the emergent markets in the Middle East and in Africa. Daewoo was given its GTC designation at this time. The government of South Korea offered major investment support to the company in the form of subsidized loans. South Korea's strict import controls angered competing countries, but the government knew that, unaided, the chaebols would never endure the global recession caused by the oil crisis during the 1970s. Protectionist policies were required to ensure that the economy continued to grow.
Even if the government felt that Samsung and Hyundai had the greater expertise in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the largest dockyard in the world was not a responsibility that Kim was wanting. He stated many times that the Korean government was stifling his entrepreneurial instinct by forcing him to carry out actions based on responsibility rather than earnings. In spite of his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a successful company manufacturing ships and oil rigs that are competitively priced on a tight production schedule. This happened during the 1980s when South Korea's economy was going through a liberalization stage.
The government throughout this time was reducing its protectionist measures that helped to fuel the rise of small businesses and medium-sized companies. Daewoo had to rid two of its textile companies at this time and the shipbuilding industry was starting to attract more foreign competition. The government's goal was to shift to a free market economy by encouraging a more effective allocation of resources. Such a policy was meant to make the chaebols more aggressive in their international dealings. However, the new economic conditions caused some chaebols to fail. Among the competitors of Daewoo, the Kukje Group, went into bankruptcy in 1985. The shift of government favour to small private businesses was intended to spread the wealth which had before been concentrated in Korea's industrial centers, Seoul and Pusan.