the reputation of products from Japan changed profoundly. Because of the success of certain exports, Japan is often viewed as a heavily export-dependent nation. As an example, just under half of all automobiles produced in Japan were exported. The growth of Japanese exports during the 1960s and 1970s was truly phenomenal. Beginning in 1960 at US$4.1 billion, merchandise exports grew at an average annual rate of 16.9% in the 1960s and at an average annual rate of 21% in the 1970s. From 1981 to 1988, however, export growth averaged 11.3% per year, about one-half the level of the 1970s. By 1990 merchandise exports reached US$286.9 billion. The growth in exports can be viewed in terms of both pull and push factors. The pull came from increasing demand for Japanese products as the United States and other foreign markets grew and as trade barriers in major market countries were reduced. Another pull factor was the price competitiveness of Japanese products. From 1960 to 1970, Japan's export price index increased by only 4%, reflecting the high rate of productivity growth in the manufacturing industries producing export products. Inflation was higher in the 1970s, but export prices were still only 45% higher in 1980 than in 1970 (growing at an average annual rate of less than 4%), considerably lower than world inflation. The 1980s began with another short burst of inflation because of oil price increases in 1979, but by 1988 Japanese export prices were actually 23% lower than in 1980, offsetting much of the price increase of the 1980s. This record enhanced the international price competitiveness of Japanese products. During the 1950s, Japanese export products had a reputation for poor quality. However, this image changed dramatically during the 1970s. Japanese steel, ships, watches, television receivers, automobiles, semiconductors, and many other goods developed a reputation for being manufactured to high standards and under strict quality control. The Japanese were the acknowledged world leaders for quality and design in the 1980s for some of these products. This rise in product quality also increased demand for Japanese exports. The push behind Japan's exports came from manufacturers. Many recognized that to reach efficient levels of production they needed to adopt a global approach. Manufacturers concentrated on the domestic market (often protected from foreign products) until they reached internationally competitive levels and domestic markets were saturated. Often helped by the large general trading companies, manufacturers aggressively attacked