Daewoo expanded into the construction industry, helping a development program for rural Korea, the new village movement. The corporation also took advantage of the burgeoning African and Middle Eastern markets. Daewoo was given its GTC designation at this time. The government of South Korea offered major investment assistance to the corporation 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 would never endure the world recession caused by the oil crisis during the 1970s. Protectionist policies were needed to make sure that the economy continued to grow.
Even though the government felt that both Hyundai and Samsung 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 many times that the Korean government was stifling his entrepreneurial instinct by forcing him to undertake actions based on responsibility rather than profit. Despite his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a successful company making competitively priced oil rigs and ships on a tight production schedule. This happened during the 1980s when South Korea's economy was going through 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 rid two of its important textile companies, and its shipbuilding industry faced stiffer competition from abroad. 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 intended to make the chaebols more aggressive in their worldwide dealings. Nonetheless, the new economic conditions caused some chaebols to fail. One of Daewoo's competitors, the Kukje Group, went into liquidation in the year 1985. The shift of government favour to small private businesses was intended to spread the wealth that had previously been concentrated in Korea's industrial centers, Pusan and Seoul.