Daewoo moved into the construction industry, helping to create the new village movement, that was a part of Korea's rural development program. The corporation was also able to capitalize on the growing markets within the Middle East and in Africa. Daewoo received its GTC designation during this time. Major investment help was provided by the South Korean government to the corporation in the form of subsidized loans. The competing nations were angered by the strict import controls of South Korea, but the government knew that, unaided, the chaebols will never endure the global recession caused by the 1970's oil crisis. Protectionist policies were needed to ensure that the economy continued to grow.
Even if the government felt that Samsung and Hyundai had the better knowledge in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the largest dockyard within the world was not a responsibility which Kim was wanting. He stated numerous times that the government of Korea was stifling his entrepreneurial instinct by forcing him to undertake actions based on duty instead of earnings. In spite of his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a profitable corporation making oil rigs and ships that are competitively priced on a tight production timetable. This took place during the 1980s when South Korea's economy was experiencing 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 objective of the government was to shift to a free market economy by encouraging a more efficient allocation of resources. Such a policy was meant to make the chaebols more aggressive in their global dealings. Nonetheless, the new economic climate caused some chaebols to fail. The Kukje Group, one of the competitors of Daewoo, went into liquidation during 1985. The shift of government favour to small private businesses was meant to spread the wealth which had before been concentrated within Korea's industrial centers, Seoul and Pusan.