Daewoo moved into the construction business, helping to make the new village movement, which was a part of the rural development program in Korea. The corporation was also able to take advantage of the growing markets in the Middle East and within Africa. Daewoo received its GTC designation at this time. Major investment support was provided by the government of South Korea 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 will never endure the global recession caused by the 1970's oil crisis. Protectionist policies were needed to ensure that the economy continued to grow.
Daewoo's move into shipbuilding was required by the government, even if Kim felt that Samsung and Hyundai had better knowledge in heavy engineering and was more suitable to shipbuilding compared to Daewoo. Kim did not want to take responsibility for the biggest dockyard within the world, at Okpo. He stated many times that the government of Korea was stifling his entrepreneurial instinct by forcing him to carry out actions based on duty rather than earnings. In spite of his unwillingness, Kim was able to turn Daewoo Shipbuilding and Heavy Machinery into a really profitable company producing ships and oil rigs which are competitively priced on a tight production timetable. This took place in the 1980s when South Korea's economy was experiencing a liberalization stage.
The government in 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 corporations at this time and the shipbuilding industry was starting to attract more foreign competition. The goal 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 worldwide dealings. Nevertheless, the new economic climate caused some chaebols to fail. The Kukje Group, amongst the competitors of Daewoo, went into liquidation in the year 1985. The shift of government favour to small private businesses was intended to spread the wealth that had before been concentrated in Seoul and Pusan, Korea's industrial centers.