Q: What's the best way to lose belly fat: diet or exercise?
A: You really need both, and here's why: Losing fat (all kinds of fat, not just the belly fat that covers your lower abs) requires an energy deficit. At the end of the day, you need your body to realize that it didn't take in enough caloric currency to pay for your daily efforts, forcing it to tap into its energy savings account (stored fat). The greater this deficit, the more weight you will lose.
Diet and exercise can both help you create an energy deficit and lose weight, but I'm assuming you don't just want what works, you want what works best. What gives you the biggest return for the time you invest