Daewoo expanded into the construction business, helping the new village movement, a development program for rural Korea. The corporation also took advantage of the growing Middle Eastern and African markets. Daewoo was given its GTC designation during this time. The South Korean government provided major investment support to the company in the form of subsidized loans. The competing nations were angered by South Korea's strict import controls, but the government knew that, without help, the chaebols will never survive the world recession caused by the 1970's oil crisis. Protectionist policies were required to make certain that the economy continued to grow.
Even if the government felt that both Hyundai and Samsung had the better skill in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the biggest dockyard within the world was not a responsibility that Kim was wanting. He said numerous times that the Korean government was stifling his entrepreneurial instinct by forcing him to carry out actions based on duty rather than profit. Despite his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a profitable company making competitively priced ships and oil rigs on a tight production schedule. This happened during the 1980s when the economy within South Korea was experiencing a liberalization stage.
Throughout this period, the government relaxed its protectionist measures and encouraged the existence of small- and medium-sized businesses. Daewoo was forced to divest two of its crucial textile companies, and its shipbuilding industry faced stiffer competition from overseas. The goal 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. Nevertheless, the new economic climate caused some chaebols to fail. Amongst the competitors of Daewoo, the Kukje Group, went into liquidation during the year 1985. The shift of government favour to small private companies was intended to spread the wealth that had previously been concentrated within Korea's industrial centers, Pusan and Seoul.