Daewoo moved into the construction business, helping to create the new village movement, that was a part of the rural development program in Korea. The corporation was also able to capitalize on the growing markets in the Middle East and within Africa. Daewoo was given its GTC designation during this time. Major investment help was offered by the South Korean government to the company in the form of subsidized loans. The competing countries were angered by the strict import controls of South Korea, but the government knew that, independently, the chaebols will never endure the global recession caused by the 1970's oil crisis. Protectionist policies were needed to ensure that the economy continued to grow.
Daewoo's move into shipbuilding was required by the government, even if Kim felt that both Hyundai and Samsung had better knowledge in heavy engineering and was more suited to shipbuilding compared to Daewoo. Kim did not want to take responsibility for the largest dockyard in the world, at Okpo. 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. Despite his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a profitable corporation making competitively priced oil rigs and ships on a tight production schedule. This took place during the 1980s when South Korea's economy was experiencing a liberalization stage.
The government in this time was lessening its protectionist measures that helped to fuel the rise of small companies and medium-sized companies. Daewoo had to rid two of its textile corporations at this time and the shipbuilding business was starting to attract more foreign competition. The government's objective 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 worldwide dealings. However, the new economic climate caused some chaebols to fail. The Kukje Group, amongst Daewoo's competitors, went into liquidation during the year 1985. The shift of government favour to small private businesses was meant to spread the wealth that had previously been concentrated in Korea's industrial centers, Seoul and Pusan.