Daewoo expanded into the construction industry, serving the new village movement, a development program for rural Korea. The corporation also took advantage of the burgeoning African and Middle Eastern markets. Daewoo was given its GTC designation during this time. The South Korean government offered major investment help to the corporation in the form of subsidized loans. South Korea's strict import controls angered competing nations, but the government knew that, without help, the chaebols would never endure the global recession caused by the 1970's oil crisis. Protectionist policies were required to ensure 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 than Daewoo. Kim did not want to take 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 undertake actions based on duty instead of revenue. Despite his reluctance, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a successful company manufacturing competitively priced ships and oil rigs on a tight production schedule. This took place in the 1980s when the economy within South Korea was experiencing 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 companies. Daewoo had to divest two of its textile companies at this time and the shipbuilding business was beginning to attract more foreign competition. The government's goal 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 global dealings. Then again, the new economic climate caused some chaebols to fail. Among the competitors of Daewoo, the Kukje Group, went into liquidation in the year 1985. The shift of government favour to small private companies was meant to spread the wealth which had previously been concentrated within Korea's industrial centers, Pusan and Seoul.