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 capitalize on the emergent markets within the Middle East and in Africa. Daewoo was given its GTC designation at this time. Major investment support was offered by the South Korean government to the corporation in the form of subsidized loans. South Korea's strict import controls angered competing countries, but the government knew that, without help, the chaebols will never survive the global recession caused by the oil crisis during the 1970s. Protectionist policies were necessary to ensure that the economy continued to grow.
Daewoo's move into shipbuilding was required by the government, even though Kim felt that both Samsung and Hyundai had better expertise in heavy engineering and was more suitable to shipbuilding compared to Daewoo. Kim did not want to assume responsibility for the biggest dockyard in the world, at Okpo. He stated numerous times that the Korean government was stifling his entrepreneurial instinct by forcing him to carry out actions based on duty rather than earnings. Despite his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a very successful company making ships and oil rigs that are competitively priced on a tight production schedule. This happened during the 1980s when the economy within South Korea was going through a liberalization stage.
The government during this time was lessening its protectionist measures which helped to fuel the rise of small companies and medium-sized businesses. Daewoo had to divest two of its textile corporations at this time and the shipbuilding industry was beginning to attract more foreign competition. The objective 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 global dealings. However, 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 meant to spread the wealth that had before been concentrated in Pusan and Seoul, Korea's industrial centers.