Daewoo moved into the construction industry, helping to create 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 within Africa. Daewoo was given its GTC designation at this time. The South Korean government provided major investment assistance to the company in the form of subsidized loans. The strict import controls of South Korea angered competing nations, 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 needed to ensure that the economy continued to grow.
Even if the government felt that both Samsung and Hyundai had the better skill in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the largest dockyard within the globe 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 duty instead of earnings. Despite his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a very successful company producing competitively priced ships and oil rigs on a tight production timetable. This took place in the 1980s when South Korea's economy was experiencing a liberalization stage.
In this period, the government relaxed its protectionist measures and encouraged the existence of small- and medium-sized businesses. Daewoo was forced to divest 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 worldwide dealings. Nevertheless, the new economic climate caused some chaebols to fail. Among Daewoo's competitors, the Kukje Group, went into bankruptcy in the year 1985. The shift of government favour to small private companies was intended to spread the wealth which had previously been concentrated in Seoul and Pusan, Korea's industrial centers.