Daewoo moved into the construction business, helping to make the new village movement, which was a part of Korea's rural development program. The corporation was also able to capitalize on the growing markets in the Middle East and within Africa. Daewoo received its GTC designation during 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 nations, but the government knew that, independently, the chaebols will never endure the world recession caused by the oil crisis during the 1970s. Protectionist policies were necessary to make sure that the economy continued to grow.
Daewoo's move into shipbuilding was required by the government, even though Kim felt that both Hyundai and Samsung had better skill in heavy engineering and was more suited to shipbuilding compared to Daewoo. Kim did not want to assume responsibility for the biggest dockyard within the world, at Okpo. He said numerous times that the Korean government was stifling his entrepreneurial instinct by forcing him to carry out actions based on duty instead of revenue. Despite his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a very successful corporation making ships and oil rigs that are competitively priced on a tight production schedule. This happened in the 1980s when the economy in South Korea was going through a liberalization stage.
The government throughout this time was lessening its protectionist measures that 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 industry was starting 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 intended to make the chaebols more aggressive in their worldwide dealings. Then again, the new economic conditions caused some chaebols to fail. Among Daewoo's competitors, the Kukje Group, went into liquidation during 1985. The shift of government favour to small private companies was meant to spread the wealth which had previously been concentrated within Pusan and Seoul, Korea's industrial centers.