By Kanupriya Kapoor and Jonathan Thatcher
JAKARTA (Reuters) - Indonesia's military is concerned that a rebalancing of power in the Asia-Pacific is driving an arms race in the region and that increasingly tetchy territorial disputes could trigger conflict, its armed forces chief said.
In an interview with Reuters, military commander Moeldoko did not single out China for criticism, but his comments are the latest from regional officials that suggest there are growing fears over China's assertiveness and military modernization.
"We are definitely worried because there is a trend happening in the region right now and that is an arms race, between ASEAN (the Association of Southeast Asian Nations) countries themselves and between major powers," he said late on Wednesday.
According to IHS Jane's, a defense publisher, the Asia-Pacific region is the only part of the world to see military spending grow steadily since 2008.
China is believed to have more than quadrupled its military spending since 2000 and by 2015 is expected to be outspending Britain, France and Germany combined. Even with Chinese spending stripped out, the rest of the Asia-Pacific region is seen overtaking the whole of Western Europe by the same date.
Moeldoko said it was important that what he called a rebalancing of power in Asia as well as efforts by the United States to step up its military presence in the region did not create "provocations".
He also said the Indonesian military was constantly assessing the risk to the country's oil- and gas-rich Natuna Islands close to an area of the South China Sea claimed by Beijing but insisted that Jakarta remained neutral in the conflicting claims over sovereignty in the region.
"We always need to evaluate the forces that are deployed in and around the Natuna region. We have to consider any spillover that emerges which we will have to deal with," he said.
The Natuna Islands lie close to China's so-called nine-dash-line, which Beijing uses on its official maps to display its claim to 90 percent of the South China Sea. The Philippines, Vietnam, Malaysia, Brunei and Taiwan also claim parts of the potentially resource rich waters.
Indonesia has long played a neutral role and sought to mediate in the disputes, although it has openly criticized China's hard-nosed approach for inflaming regional tension.
China's Foreign Ministry issued a statement on Wednesday saying Beijing had no dispute with Jakarta over the Natuna Islands in response to some reports that a row might be brewing.
That was a view backed by Indonesian Foreign Minister Marty Natalegawa.
"It must be made crystal clear that between Indonesia and China there are no outstanding or overlapping maritime territorial disputes," he told Reuters on Thursday.
However, Indonesia has been asking for clarification through the United Nations since 2010 of the legal basis for China's nine-dash line, a set of dashes on Chinese maps that stretch deep into the heart of maritime Southeast Asia.
Natalegawa said Indonesia had "inferred" from China that the line did not cross Indonesian territory.
The 56-year-old Moeldoko, named armed forces chief last August, went to Beijing in February for talks with China's military.
"We're not focused particularly on China's developments but we see there is a dispute in that region. And from that dispute we should anticipate or look at the future prospects in the region, and that is a part of our calculations.
"I explained (to my Chinese counterpart) that we are a sovereign country, we will protect our territory, and we will do whatever is necessary to protect our sovereignty. They understand that," he said.
(Additional reporting by Ben Blanchard in Beijing; Editing by Dean Yates)