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 growing markets within the Middle East and in Africa. Daewoo was given its GTC designation at this time. The government of South Korea provided major investment help to the company in the form of subsidized loans. The strict import controls of South Korea angered competing countries, but the government knew that, unaided, the chaebols would never endure the world recession caused by the oil crisis during the 1970s. Protectionist policies were needed to make certain that the economy continued to grow.
Daewoo's move into shipbuilding was required by the government, even though Kim felt that Hyundai and Samsung had better knowledge in heavy engineering and was more suitable to shipbuilding than Daewoo. Kim did not want to take responsibility for the biggest dockyard within the world, at Okpo. He stated many times that the government of Korea was stifling his entrepreneurial instinct by forcing him to carry out actions based on duty instead of profit. Despite his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a profitable company producing competitively priced ships and oil rigs on a tight production schedule. This happened during the 1980s when the economy in South Korea was experiencing a liberalization stage.
The government throughout this time was reducing its protectionist measures which helped to fuel the rise of small businesses and medium-sized businesses. Daewoo had to rid two of its textile companies at this time and the shipbuilding business 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 intended to make the chaebols more aggressive in their international dealings. Then again, the new economic conditions caused some chaebols to fail. The Kukje Group, amongst the competitors of Daewoo, went into liquidation in 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.