Daewoo moved into the construction sector, helping to make the new village movement, that 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 in Africa. Daewoo was given its GTC designation at this time. Major investment assistance was provided by the South Korean government to the corporation in the form of subsidized loans. South Korea's strict import controls angered competing nations, but the government knew that, unaided, the chaebols will never survive the global recession caused by the oil crisis during the 1970s. Protectionist policies were required to make sure that the economy continued to grow.
Even though the government felt that both Samsung and Hyundai had the better knowledge in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the biggest dockyard in the world was not a responsibility which Kim was wanting. He said a lot of times that the Korean government was stifling his entrepreneurial instinct by forcing him to carry out actions based on duty instead of revenue. In spite of his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a really successful company manufacturing oil rigs and ships that are competitively priced on a tight production schedule. This took place in the 1980s when South Korea's economy was going through a liberalization stage.
During this period, the government relaxed its protectionist measures and encouraged the existence of medium- and small-sized businesses. Daewoo was forced to rid two of its important textile companies, and its shipbuilding industry faced stiffer competition from abroad. The government's goal 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 international dealings. Nonetheless, the new economic climate caused some chaebols to fail. The Kukje Group, one of the competitors of Daewoo, went into bankruptcy in the year 1985. The shift of government favour to small private businesses was meant to spread the wealth that had before been concentrated within Korea's industrial centers, Seoul and Pusan.