Cai Lun (蔡倫, also known as Tsai Louen or Tsai Lun; both are anachronistic romanisations) was born in Ch'en-chou, China, in 50 AD. He entered the bureaucracy of the Eastern Han dynasty in Hunan in AD 75 and became Chief Eunuch in AD 85, eventually committing suicide via poison as a result of court intrigues around 121 AD - 7 years after he was awarded the title of Marquess for his revolutionary invention, paper, as discussed above. Cai Lun's method was simple but effective; after soaking fibrous plant material, he pounded it with a wooden tool and allowed the water to drain from the mixture on a piece of coarse cloth.
The immediate popularity of the invention attributed to him is evident in the discovery of paper (dated to within 50 years of Cai Lun's death) in the inhospitable deserts of arid Chinese Turkestan, as well as the rapid diversification of its functions, including writing, wrapping and hygiene. The province of Guizhou became renowned for its paper-making workshops.
Prior to the invention of paper, China had lagged behind many cultures to the west. This is partially attributed to the earlier development of agriculture in the Fertile Crescent, but also to the earlier proliferation of writing in West Asian civilisations and the inefficiency of materials traditionally used in China for purposes of transcription. While the former used papyrus and had done so since around 3000 BC, Chinese books composed of bamboo (arranged in narrow vertical strips and written upon using vertical calligraphy) were heavy and awkward, while silk books were inaccessibly expensive.
Paper reached Korea, Vietnam and Japan during the 3rd century (eventually coming into vogue in the latter around 610 AD) and was incepted into the Middle East after the capture of Chinese paper-makers by Arabs in 751, a year which marked the abrupt cessation of centuries of trade. The first Arab paper was created in Samarkand and would quickly come to replace the production of papyrus (from which the word 'paper' originates) in the Middle East and North Africa. The first European paper was created in Spain in 1150, spreading quickly to other nations where it displaced the use of parchment and hides (which were inefficient materials for creating books in significant quantities). The invention of the printing press further emphasised the superiority of paper to other writing materials, greatly facilitating technological advancement and academic thought in European societies.
Paper achieved more or less complete global saturation by the 19th century.
Sources:
The 100: A Ranking of the Most Influential Persons in History, Michael H. Hart
http://www.tappi.org/paperu/all_about_paper/paperHistory.htm
http://www.mead.com/ml/docs/facts/history.html
http://www.columbia.edu/itc/eacp/webcourse/chinaworkbook/gift/paper.htm
http://www.upei.ca/~xliu/multi-culture/tsai.htm
http://www.computersmiths.com/chineseinvention/paper.htm