Daewoo expanded into the construction sector, serving the new village movement, a development program for rural Korea. The corporation also took advantage of the growing African and Middle Eastern markets. Daewoo was given its GTC designation at this time. The government of South Korea offered major investment help to the corporation in the form of subsidized loans. The strict import controls of South Korea angered competing countries, but the government knew that, unaided, the chaebols would never endure the world recession caused by the 1970's oil crisis. Protectionist policies were necessary to make certain that the economy continued to grow.
Even though the government felt that Samsung and Hyundai had the better expertise in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the largest dockyard in 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 carry out actions based on responsibility rather than earnings. Despite his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a very successful company making oil rigs and ships which are competitively priced on a tight production schedule. This happened in the 1980s when South Korea's economy was going through a liberalization stage.
The government in this time was reducing its protectionist measures which helped to fuel the rise of small businesses and medium-sized companies. Daewoo had to divest two of its textile corporations at this time and the shipbuilding industry was beginning to attract more foreign competition. The objective 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. Then again, the new economic conditions caused some chaebols to fail. The Kukje Group, one of Daewoo's competitors, went into bankruptcy in the year 1985. The shift of government favour to small private companies was intended to spread the wealth that had previously been concentrated within Korea's industrial centers, Seoul and Pusan.