1. Why does China say the islands belong to it?
The ownership of the islands has now become a highly disputable issue, but it is far less disputable that it was the Chinese who first discovered, named, mapped, fished, and built shelters and even temples on the islands almost centuries ago in the vast waters to the South of China, hence the name of the sea.
The islands were briefly seized by foreign invaders, but China recovered the islands after World War II. The islands were marked and recognized as Chinese not only in Chinese maps but also maps of the United States, the Soviet Union, the United Kingdom, Vietnam and the Philippines until the 1970s.
No country in the neighborhood had challenged China's position on the islands until then when the energy crisis broke out and the South China Sea was reported to have plenty of oil and gas. Some countries began to lay claim to the islands, occupy them and exploit oil and gas in the waters, despite China's clear opposition.
Some would seek to justify their dubious actions with the UN Convention on the Law of the Sea in 1982. But even this important convention respects China's reservations on its historical rights in the South China Sea. Chinese fishermen have fished and taken shelter there just a few millennia longer than existence of the convention itself.
Some would argue the islands are geographically closer to them, not China. People with some sense of International Law would well understand that distance is not the single most important factor to determine who owns an island. Just take a look at the Greek islands in the Aegean Sea or the British islands off the French coast.
2.Who is provocative? 
To keep its good ties with its neighbors, China has resorted to the ancient wisdom of patience and cooperation. It has proposed to jointly develop the South China Sea pending a solution to the disputes. However, Vietnam and the Philippines have refused to do so while unilaterally going in for oil drilling and have kept harassing and intimidating Chinese fishing boats in the disputed waters.
Last month a Chinese fishing boat was detained by the Philippine armed men in waters near the Banyue Reef of the Nansha Islands. How can the Philippines play the role of victim when it takes nine Chinese fishermen as hostages and when China takes no Philippine trespassers into its custody.
When China continued to reach out to the Philippines for bilateral talks, the Philippines simply shut the door on dialogue and went unilaterally to international arbitration. Any valid international arbitration like a civil arbitration would require the consent of both parties. Knowing China would not entertain this unilateral move, the Philippines does not seek to resolve the dispute with China but to make it more difficult and complex to resolve. 
As for China's latest spat with Vietnam over oil drilling rig 981, CNOOC(China National Offshore Oil Corporation, a major Chinese offshore oil and gas company) has been operating in the waters off China's Xisha Islands for ten years. Installing the drilling rig is only a natural course of action as part of the whole commercial operation, just like the test drillings in Aphrodite Block 12 of Cyprus. Despite the rhetorics against China, It is worth noting that the rig at the issue is just 17 nautical miles from a Chinese island but 150 nautical miles from the nearest Vietnamese coast. The Vietnamese sent over 40 vessels, some equipped with arms and even specially-trained frogmen, in an obvious attempt to sabotage the rig in broad daylight. The Chinese had to respond by sending its civil law enforcement vessels simply to protect the costly installation. As China has a dozen times more population than the Vietnamese, it was no surprise the Vietnamese could not beat China in numbers at sea in a standoff.
Emotions ran high among people in both countries. Things got out of control in Vietnam and riotings and looting ravaged foreign-invested factories. Two Chinese lost their lives and hundreds were injured. China has certainly exercised utmost restraint and has not taken any measures in retaliation. Not a single Vietnamese life was ever in danger. If one looks for signs of provocation, just tally the numbers of provocative moves and human beings in custody, injured or even killed.
China may be big in size. But in a real jungle, this huge animal looks more like an elephant with a pacific temper confronted by smaller but more aggressive predators and forced into a defensive position. Size alone does not always tell the true story in a brawl.
3.Does China need to make trouble elsewhere to shift the attention of its public?

China had enjoyed double-digit growth for over three decades since 1980s and lifted 200 million people out of poverty, creating an economic miracle in human history. The Chinese know well that the secret of success lies in China's peaceful development. Having had more than their fair share of wars and chaos in the 19th and 20th century, the Chinese cherish peace as much as the apple of the eye. The Chinese are convinced that they have benefited from and will continue to gain from peace and stability inside and outside the country. War or conflict is the last thing they would ever want.
Given the global economic doldrums, China has its own challenges and can no longer take economic growth for granted. But China's economic picture is not at all as gloomy as some pessimists have depicted. China's GDP grew by 7.6% last year and 7.4% in the first quarter this year, not a bad record for a 9 trillion US$ economy, the second largest in the world. China's continued massive industrialization, urbanization and information revolution will keep it on the track of fast economic growth in the next few decades to come. It does not take someone who runs the huge country to tell from the facts that China has no reason whatsoever to disrupt the peaceful environment for its own good or to shift the attention from growth to risky adventures elsewhere.
4.What's the way out?
Though the disputes have been there for decades, tensions and emotions have run high from time to time, one should not forget the Asians tend to have a longer perspective towards history. China, Vietnam and the Philippines have been neighbors for thousands of years. In international relations, one cannot choose one's own neighbors. Fortunately relations among these nations have been in better terms for longer times. Sovereign and territorial issues are sensitive to any nation. Military alliance, a residue of cold-war instinct, has not resolved and will not help China, Vietnam or the Philippines in any way to resolve their neighborhood frictions. Whatever others may do, at the end of the day, it is still up to the countries themselves to work out peaceful solutions that will last as long as they are neighbors.
Peaceful negotiations may prove to be time-consuming, foot-dragging and sometimes even disappointingly exhausting, but they should become the norm of the day if we want to see a 21st century very different from the 20th century and if we want to see everybody better off in such a new century.