Daewoo expanded into the construction sector, serving a development program for rural Korea, the new village movement. The company also capitalized on the burgeoning African and Middle Eastern markets. Daewoo received its GTC designation during this time. Major investment help was provided by the South Korean government to the company in the form of subsidized loans. The competing nations were angered by South Korea's strict import controls, but the government knew that, independently, the chaebols will never endure the global recession caused by the 1970's oil crisis. Protectionist policies were essential to ensure that the economy continued to grow.
Even though the government felt that both Hyundai and Samsung had the better skill 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 said many times that the government of Korea was stifling his entrepreneurial instinct by forcing him to undertake actions based on responsibility rather than revenue. Despite his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a very profitable company manufacturing competitively priced ships and oil rigs on a tight production timetable. This happened in the 1980s when the economy within South Korea was experiencing a liberalization stage.
The government throughout this time was reducing its protectionist measures which helped to fuel the rise of small companies and medium-sized businesses. Daewoo had to divest two of its textile companies at this time and the shipbuilding industry was beginning to attract more foreign competition. The government's objective 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 global dealings. Then again, the new economic conditions caused some chaebols to fail. One of the competitors of Daewoo, 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 which had previously been concentrated in Pusan and Seoul, Korea's industrial centers.