Daewoo expanded into the construction industry, helping a development program for rural Korea, the new village movement. The company also took advantage of the growing Middle Eastern and African markets. Daewoo was given its GTC designation during this time. Major investment support was provided by the South Korean government to the corporation in the form of subsidized loans. The competing nations were angered by the strict import controls of South Korea, but the government knew that, independently, the chaebols will never endure the world recession caused by the oil crisis in the 1970s. Protectionist policies were necessary to ensure that the economy continued to grow.
Even though the government felt that Hyundai and Samsung had the greater knowledge in heavy engineering, Daewoo was forced into shipbuilding by the government. Okpo, the biggest dockyard in the globe was not a responsibility that Kim was wanting. He stated a lot of times that the government of Korea was stifling his entrepreneurial instinct by forcing him to carry out actions based on duty instead of revenue. In spite of his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a profitable corporation manufacturing oil rigs and ships that are competitively priced on a tight production schedule. This took place during the 1980s when the economy within South Korea was experiencing a liberalization stage.
During this period, the government relaxed its protectionist measures and encouraged the existence of small- and medium-sized companies. Daewoo was forced to divest two of its important textile corporations, and its shipbuilding industry faced stiffer competition from overseas. The objective 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 global dealings. Then again, the new economic climate caused some chaebols to fail. Among Daewoo's competitors, the Kukje Group, went into liquidation in 1985. The shift of government favour to small private businesses was intended to spread the wealth which had before been concentrated in Korea's industrial centers, Seoul and Pusan.