Paper was said to be first invented in AD 105 and reported to the Chinese Emperor by Ts'ai Lun, an official of the Imperial Court even though the archeological findings cite otherwise. Archeologists claim that the actual invention took place 200 years much earlier.
Early Chinese paper appears to have been made from a suspension of hemp with other plant fibres like tree bark and bamboo as an addition. The first real advance in paper-making emerged with the development of a smooth material for the mold covering which enabled it to be reused immediately once the new sheet is removed. More methods of improvement took place as the Chinese realised the importance of paper which included the usage of starch as a sizing material and insect repellent made out of a yellow dye.
Production of paper started as early as the 6th century AD in Korea where the fibres of hemp, rattan, mulberry, bamboo, rice straw and seaweed were used to prepare the pulp. Thanks to a Korean monk, the invention then spread to Japan in approximately AD 610. Rise of Buddhism in Japan rocketed the demand for paper supply which was formerly used only for official records and documentation.
With some help from the Chinese paper makers, the Tibetans too started to make their own paper as a substitute for their traditional writing materials. The trade and art of paper making then begun to take the world by storm through trade and battles. Chinese artisans held as prisoners from battles were forced to make papers for their captors.
As papermaking 'invaded' Baghdad, Damascus, Egypt and Morocco by the 10th century combined with a lack of Chinese materials, Middle Eastern papermakers prepared pulps using flax and human-powered triphammer.
Papermaking took 500 years to reach Europe from Samarkand although export of paper to some parts of Europe took place as early as the 10th and 11th centuries. Paper was not popular among the westerners as it was treated as a manifestation of Moslem culture. Official documents written on paper was declared to be invalid. This whole negative notion of paper changed with the rise of printing press in the mid 1400's.
Source of information: Museum Tour: The Invention of Paper