Daewoo moved into the construction industry, helping to make the new village movement, which was a part of the rural development program in Korea. The corporation was also able to capitalize on the growing markets within the Middle East and within Africa. Daewoo was given its GTC designation at this time. Major investment help was offered by the South Korean government to the corporation in the form of subsidized loans. The competing countries were angered by the strict import controls of South Korea, but the government knew that, unaided, the chaebols will never survive the world recession caused by the oil crisis during the 1970s. Protectionist policies were necessary to make certain that the economy continued to grow.
Even if the government felt that Hyundai and Samsung had the greater expertise in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the largest dockyard within the globe was not a responsibility which Kim was wanting. He said lots of times that the Korean government was stifling his entrepreneurial instinct by forcing him to undertake actions based on responsibility instead of revenue. Despite his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a very profitable company manufacturing competitively priced oil rigs and ships on a tight production timetable. This took place during the 1980s when the economy in South Korea was experiencing a liberalization stage.
The government during this time was lessening its protectionist measures that helped to fuel the rise of small companies and medium-sized companies. Daewoo had to divest two of its textile corporations at this time and the shipbuilding business was beginning to attract more foreign competition. The objective of the government 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 global dealings. Nonetheless, the new economic conditions caused some chaebols to fail. One of the competitors of Daewoo, the Kukje Group, went into bankruptcy during 1985. The shift of government favour to small private companies was meant to spread the wealth which had previously been concentrated in Seoul and Pusan, Korea's industrial centers.