Obama said the land reclamation projects are 'counterproductive.'
American interests are few and of middling importance.
U.S. Defense Secretary Ash Carter said the scale of Beijing's activities, not the United States, was altering the status quo in the region.
The Pentagon is considering sending military aircraft and ships to patrol the Spratly archipelago.
Tensions have festered over China's island building in the South China Sea.
The Chinese navy issued eight warnings to the U.S. P8-A Poseidon.
China could eventually deploy radar and missile systems on outposts it is building in the South China Sea.
A Chinese fighter jet flew as close as 20 to 30 feet to a P-8 Poseidon maritime patrol plane and did a barrel roll, the Pentagon says.
China and the U.S. are holding talks expected to focus on cyber-security, maritime disputes, the Chinese currency and an investment treaty
John Kerry pointed to China's introduction of an oil rig and several vessels in waters disputed with Vietnam as "provocative."
The United States has called China's deployment of an oil rig "provocative and unhelpful" to security in the region