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 within Africa. Daewoo received its GTC designation during this time. Major investment support was offered by the South Korean government to the company in the form of subsidized loans. The strict import controls of South Korea angered competing countries, but the government knew that, independently, the chaebols will never survive the global recession caused by the 1970's oil crisis. Protectionist policies were necessary to make sure that the economy continued to grow.
Even though the government felt that Samsung and Hyundai had the better skill in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the largest dockyard in the globe was not a responsibility which Kim was wanting. He said many times that the Korean government was stifling his entrepreneurial instinct by forcing him to undertake actions based on duty instead of revenue. Despite his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a successful company producing ships and oil rigs which are competitively priced on a tight production schedule. This happened 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 companies and medium-sized companies. Daewoo had to divest two of its textile corporations at this time and the shipbuilding industry was starting to attract more foreign competition. The government's objective 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. Nevertheless, the new economic conditions caused some chaebols to fail. The Kukje Group, amongst Daewoo's competitors, went into bankruptcy during 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.