Daewoo expanded into the construction business, serving the new village movement, a development program for rural Korea. The corporation also capitalized on the growing African and Middle Eastern markets. Daewoo received its GTC designation during this time. Major investment help was provided by the South Korean government to the company in the form of subsidized loans. The strict import controls of South Korea angered competing countries, but the government knew that, without help, the chaebols will never endure the world recession caused by the 1970's oil crisis. Protectionist policies were needed to make certain that the economy continued to grow.
Even if the government felt that Samsung and Hyundai had the better expertise in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the largest dockyard in the globe was not a responsibility that Kim was wanting. He stated many times that the Korean government was stifling his entrepreneurial instinct by forcing him to carry out actions based on responsibility instead of earnings. Despite his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a very profitable corporation 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.
During 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 corporations, and its shipbuilding industry faced stiffer competition from overseas. 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 global dealings. Nonetheless, the new economic conditions caused some chaebols to fail. One of the competitors of Daewoo, the Kukje Group, went into liquidation during 1985. The shift of government favour to small private companies was meant to spread the wealth that had previously been concentrated within Korea's industrial centers, Seoul and Pusan.