In a nutshell China has made claim to these islands-reefs which are also claimed by several other countries. They are thousands of miles from the Chinese mainland and now they are building airfields and military facilities upon them. The islands themselves are not valuable but there may be a lot of gas and oil around them. There are several sets of coral reefs and islands which they have been dredging and making larger, the Spratlies are just one group.
Obama has said that we (the US) are going to sail navy ships inside the islands 12 mile limit to dispute the Chinese claims.
Lots of stuff on the net about it I’m sure would explain it better than me.
Cheers
ipso