Daewoo expanded into the construction industry, serving the new village movement, a development program for rural Korea. The company also capitalized on the burgeoning Middle Eastern and African markets. Daewoo received its GTC designation at this time. The government of South Korea offered major investment support to the company in the form of subsidized loans. South Korea's strict import controls 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 essential to ensure that the economy continued to grow.
Even though the government felt that Samsung and Hyundai had the better 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 Korean government was stifling his entrepreneurial instinct by forcing him to undertake actions based on responsibility rather than earnings. Despite his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a very profitable company manufacturing oil rigs and ships which are competitively priced on a tight production timetable. This took place in the 1980s when the economy in South Korea 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 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 goal of the government 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 international dealings. Nevertheless, the new economic conditions caused some chaebols to fail. Among Daewoo's competitors, the Kukje Group, went into liquidation during the year 1985. The shift of government favour to small private businesses was intended to spread the wealth that had previously been concentrated within Pusan and Seoul, Korea's industrial centers.