Daewoo moved into the construction industry, helping to make the new village movement, which was a part of Korea's rural development program. The company was also able to capitalize on the emergent markets in the Middle East and in Africa. Daewoo received its GTC designation at this time. Major investment support was provided by the South Korean government to the corporation in the form of subsidized loans. The strict import controls of South Korea angered competing countries, but the government knew that, independently, the chaebols would never survive the world recession caused by the oil crisis in the 1970s. Protectionist policies were essential to make sure that the economy continued to grow.
Even though the government felt that both Samsung and Hyundai had the greater knowledge 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 stated 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 profit. In spite of his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a very successful corporation making competitively priced ships and oil rigs on a tight production timetable. This took place in the 1980s when the economy in South Korea was experiencing a liberalization stage.
The government throughout this time was lessening its protectionist measures which helped to fuel the rise of small companies and medium-sized businesses. Daewoo had to rid two of its textile companies at this time and the shipbuilding industry was beginning to attract more foreign competition. The government's goal 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. Then again, the new economic climate caused some chaebols to fail. The Kukje Group, among the competitors of Daewoo, went into bankruptcy in the year 1985. The shift of government favour to small private businesses was intended to spread the wealth which had previously been concentrated within Korea's industrial centers, Pusan and Seoul.