Daewoo expanded into the construction business, helping a development program for rural Korea, the new village movement. The company also took advantage of the burgeoning Middle Eastern and African markets. Daewoo received its GTC designation during this time. The government of South Korea 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, independently, the chaebols would never survive the global recession caused by the 1970's oil crisis. Protectionist policies were required to make sure that the economy continued to grow.
Even if the government felt that both Samsung and Hyundai had the greater skill in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the biggest dockyard within the globe was not a responsibility that Kim was wanting. He said many times that the Korean government was stifling his entrepreneurial instinct by forcing him to carry out actions based on responsibility instead of earnings. In spite of his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a really profitable company manufacturing competitively priced ships and oil rigs on a tight production schedule. This took place in the 1980s when South Korea's economy was experiencing a liberalization stage.
The government during this time was reducing its protectionist measures which helped to fuel the rise of small businesses and medium-sized companies. Daewoo had to rid two of its textile corporations at this time and the shipbuilding industry was beginning to attract more foreign competition. The goal of the government 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. Amongst Daewoo's competitors, the Kukje Group, went into bankruptcy during the year 1985. The shift of government favour to small private businesses was intended to spread the wealth that had before been concentrated within Seoul and Pusan, Korea's industrial centers.