Daewoo moved into the construction business, helping to create the new village movement, which was a part of Korea's rural development program. The corporation was also able to take advantage of the growing markets in the Middle East and in Africa. Daewoo was given its GTC designation during this time. The South Korean government provided major investment support to the corporation in the form of subsidized loans. The competing nations were angered by South Korea's strict import controls, but the government knew that, independently, the chaebols would never endure the global recession caused by the 1970's oil crisis. Protectionist policies were needed to ensure that the economy continued to grow.
Even though the government felt that both Hyundai and Samsung had the greater skill 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 a lot of times that the government of Korea was stifling his entrepreneurial instinct by forcing him to undertake actions based on responsibility instead of revenue. In spite of his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a successful corporation manufacturing competitively priced oil rigs and ships on a tight production timetable. This happened in the 1980s when the economy in 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 rid two of its crucial 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 global dealings. Nevertheless, the new economic climate caused some chaebols to fail. Amongst Daewoo's competitors, the Kukje Group, went into liquidation in the year 1985. The shift of government favour to small private companies was meant to spread the wealth which had previously been concentrated within Seoul and Pusan, Korea's industrial centers.