"We do not want this region to become a battlefield between big countries. Economic costs will be too expensive if there is a conflict (in this region)," Widodo told PTI.
Underlining the importance of peace in the world's busiest shipping routes, he said that "all disputes must be resolved peacefully... There must always be respect for diplomatic and legal processes."
China claims nearly all of the strategically vital SCS -- a vast tract of water through which a huge chunk of global shipping passes. It has bolstered its claim by building artificial islands including airstrips in the area, some of which are suitable for military use.
Tension often builds up between these claimant states to Spratlys, a group of 14 islands, islets and reefs in the SCS.
In July, an international tribunal struck down China's claims of "historical rights" in the SCS, prompting Chinese President Xi Jinping to reject its ruling.
President Widodo, who is widely known as Jokowi, said Indonesia is not a claimant state but the SCS issue is complicated.
"I believe the states that are involved in the dispute can solve this problem. Indonesia is ready to facilitate," Widodo said ahead of his visit to India next week.
Indonesia, he assured, continues to accelerate the preparation of the Code of Conduct between China and ASEAN.
China is Indonesia's top import source and second biggest export destination for items such as minerals and palm oil.
Except for Brunei, the other five claimants have structures on some of the islands which ranges from hosting of flags to an airstrip by China and fuming over presence of naval ships to fishing boats.
The US, an allied partner with some of the claimant states, has called for peaceful resolutions to the disputed island issues in the SCS.
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