Daewoo moved into the construction business, helping to create the new village movement, that was a part of Korea's rural development program. The company was also able to take advantage of the emergent markets within the Middle East and in Africa. Daewoo was given 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 strict import controls of South Korea angered competing nations, but the government knew that, unaided, the chaebols would never endure the global recession caused by the 1970's oil crisis. Protectionist policies were needed to make sure that the economy continued to grow.
Daewoo's move into shipbuilding was required by the government, even if Kim felt that Hyundai and Samsung had greater skill in heavy engineering and was more suitable to shipbuilding than Daewoo. Kim did not want to take responsibility for the biggest dockyard in the world, at Okpo. He stated lots of times that the government of Korea was stifling his entrepreneurial instinct by forcing him to carry out actions based on responsibility rather than earnings. Despite his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a successful company making ships and oil rigs that are competitively priced on a tight production schedule. This took place in the 1980s when the economy in South Korea was going through a liberalization stage.
In this period, the government relaxed its protectionist measures and encouraged the existence of small- and medium-sized companies. Daewoo was forced to rid two of its crucial textile corporations, and its shipbuilding industry faced stiffer competition from abroad. The goal 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 worldwide dealings. Nonetheless, the new economic conditions caused some chaebols to fail. The Kukje Group, amongst Daewoo's competitors, went into liquidation during 1985. The shift of government favour to small private companies was intended to spread the wealth which had previously been concentrated in Pusan and Seoul, Korea's industrial centers.