Daewoo moved into the construction business, helping to create the new village movement, that was a part of the rural development program in Korea. The company was also able to take advantage of the growing markets within the Middle East and in Africa. Daewoo was given its GTC designation during this time. The South Korean government provided major investment help 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 survive the global recession caused by the 1970's oil crisis. Protectionist policies were necessary to make certain that the economy continued to grow.
Even if the government felt that Hyundai and Samsung had the better expertise in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the largest dockyard within the world was not a responsibility that 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 rather than profit. Despite his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a really successful corporation producing oil rigs and ships which are competitively priced on a tight production timetable. This took place during the 1980s when the economy within South Korea was going through a liberalization stage.
During this period, the government relaxed its protectionist measures and encouraged the existence of medium- and small-sized companies. Daewoo was forced to rid two of its crucial textile companies, and its shipbuilding industry faced stiffer competition from abroad. 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 Daewoo's competitors, went into liquidation in the year 1985. The shift of government favour to small private businesses was meant to spread the wealth which had before been concentrated in Seoul and Pusan, Korea's industrial centers.