Daewoo moved into the construction business, helping to make the new village movement, that was a part of Korea's rural development program. The corporation was also able to take advantage of the emergent markets within the Middle East and in Africa. Daewoo received its GTC designation during this time. The South Korean government 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, unaided, the chaebols would never endure the world recession caused by the 1970's oil crisis. Protectionist policies were essential to ensure that the economy continued to grow.
Daewoo's move into shipbuilding was required by the government, even if Kim felt that both Samsung and Hyundai had better knowledge in heavy engineering and was more suited to shipbuilding compared to Daewoo. Kim did not want to take responsibility for the largest dockyard in the world, at Okpo. He stated lots of times that the government of Korea was stifling his entrepreneurial instinct by forcing him to undertake actions based on duty instead of revenue. In spite of his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a really profitable corporation making competitively priced oil rigs and ships on a tight production schedule. This happened in the 1980s when South Korea's economy was experiencing a liberalization stage.
In this period, the government relaxed its protectionist measures and encouraged the existence of small- and medium-sized companies. Daewoo was forced to rid two of its crucial textile companies, and its shipbuilding industry faced stiffer competition from abroad. The government's goal 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 international dealings. However, the new economic climate caused some chaebols to fail. The Kukje Group, amongst the competitors of Daewoo, went into liquidation during the year 1985. The shift of government favour to small private businesses was intended to spread the wealth which had previously been concentrated within Pusan and Seoul, Korea's industrial centers.