Daewoo moved into the construction industry, helping to make the new village movement, that was a part of Korea's rural development program. The company was also able to take advantage of the emergent markets in the Middle East and in Africa. Daewoo was given its GTC designation at this time. Major investment support was offered by the South Korean government to the company in the form of subsidized loans. South Korea's strict import controls angered competing countries, but the government knew that, independently, the chaebols would never survive the global recession caused by the 1970's oil crisis. Protectionist policies were needed to make certain that the economy continued to grow.
Daewoo's move into shipbuilding was required by the government, even though Kim felt that Samsung and Hyundai had greater knowledge in heavy engineering and was more suited to shipbuilding than Daewoo. Kim did not want to assume responsibility for the largest dockyard within the world, at Okpo. He said lots of times that the government of Korea was stifling his entrepreneurial instinct by forcing him to undertake actions based on responsibility rather than profit. In spite of his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a really profitable company manufacturing ships and oil rigs that are competitively priced on a tight production schedule. This took place in the 1980s when the economy within South Korea was experiencing a liberalization stage.
In this period, the government relaxed its protectionist measures and encouraged the existence of medium- and small-sized businesses. Daewoo was forced to rid two of its important textile corporations, and its shipbuilding industry faced stiffer competition from abroad. 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 international dealings. Nevertheless, the new economic conditions caused some chaebols to fail. One of the competitors of Daewoo, the Kukje Group, went into bankruptcy in the year 1985. The shift of government favour to small private companies was intended to spread the wealth which had previously been concentrated in Korea's industrial centers, Pusan and Seoul.