By Eveline Danubrata
RANAI, Indonesia (Reuters) - Indonesian warplanes on Thursday staged a large-scale exercise on the edge of South China Sea territory claimed by Beijing, a show of force that adds to regional uncertainty sparked by the Philippines' sudden tilt away from the United States.
President Joko Widodo watched from Ranai, capital of the Natuna Islands archipelago, with hundreds of military officials as about 70 jets carried out manoeuvres that included a dog fight and dropping bombs on targets off the coast.
"The president has a policy that all the outer islands that are strategic will be strengthened, be it air, maritime or land," Gatot Nurmantyo, commander of the Indonesian National Armed Forces, told reporters.
"Our country needs to have an umbrella. From corner to corner, we have to safeguard it."
Foreign Minister Retno Marsudi told reporters in Ranai that the exercise was "routine", but it was also Indonesia's biggest so far and follows a move by Widodo in June to hold a cabinet meeting on board a warship off the Natuna islands.
Indonesian officials described Widodo's visit at that time as a strong message to Beijing following a spate of face-offs between Indonesia's navy and Chinese fishing boats in the gas-rich southern end of the South China Sea.
China, while not disputing Indonesia's claims to the Natuna islands, has raised Indonesian anger by saying the two countries had "overlapping claims" to waters close to them, an area Indonesia calls the Natuna Sea.
China claims almost the entire South China Sea, through which about $5 trillion worth of trade passes each year. Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have claims to parts of the sea.
While Indonesia is not part of the dispute over the South China Sea, it objects to China's inclusion of waters around the Natuna Islands within its 'nine-dash line', a demarcation line used by China to show its claims there.
Jakarta has traditionally taken a neutral position on the South China Sea itself, acting as a buffer between China and fellow members of the Association of Southeast Asian Nations (ASEAN) that have the most at stake, the Philippines and Vietnam.
"The overall strength of ASEAN depends in great part on the willingness of Indonesia to play that role of diplomatic broker ... and that's where I think we're seeing some of this wobbliness," said Euan Graham, director of International Security at the Lowy Institute, a Sydney-based think-tank.
"A VERY FLUID SITUATION"
Diplomats and analysts say that, even before the Indonesian military exercise, recent events had thrown the status quo around the South China Sea into doubt, with some countries buttressing long-held positions and others moving toward Beijing.
An open war-of-words between Singapore and China, and Vietnam letting two U.S. warships visit its highly-strategic naval base at Cam Ranh Bay this week, contrasted with more pro-Beijing moves taken by the Philippines and Malaysia.
"We're facing a very fluid situation right now," said Ian Storey, a South China Sea expert at Singapore's ISEAS Yusof Ishak Institute.
"We can see some countries taking actions that effectively reveal their consistent positions and others are being much more deferential to China, rolling over and waiting for a tummy rub from Beijing."
Storey and other analysts said the hostility toward the United States from new Philippine President Rodrigo Duterte, and his questioning of the decades-old security alliance between Manila and Washington, would fuel uncertainty long-term.
The potential for a much closer security relationship between China and Russia, which recently staged their first joint exercises in the South China Sea, was another driver.
"Make no mistake, if Duterte follows through on his rhetoric it has the potential to shift the overall dynamics of not just the South China Sea issue, but broader strategic assumptions across Southeast Asia," he said.
Zhang Baohui, a mainland security expert at Hong Kong's Lingnan University, said China may be swift to exploit a tilt away from Washington by Duterte.
"Some Chinese elites are seeing this as a God-sent gift to China," Zhang said. "This represents a huge potential shift."
(Additional reporting by Greg Torode in HONG KONG and Lincoln Feast in SYDNEY; Writing by John Chalmers; Editing by Alex Richardson)