In a medium sized bowl, sprinkle cornstarch, sherry, salt and pepper over chicken chunks. Add ginger, garlic and sesame oil. Stir to combine. Set aside.
Clean 4-5 green onions and cut into 1-inch pieces. Set aside.
Cut 2-3 dried chiles in half lengthwise, and remove seeds to add to the sauce.
Prepare cooking sauce by combining all ingredients in a measuring cup or bowl. Stir to dissolve cornstarch and sugar; set aside.
Heat 1 tablespoon canola oil in a wok over medium heat. When oil is hot, add peanuts and whole chiles and stir fry until lightly browned and toasted, about 1 minute. Remove peanuts and chiles from wok immediately into a small bowl, and set aside. Leave oil in wok.
Turn heat up to medium high, and stir fry half the chicken chunks until browned on the outside and almost cooked through. Remove chicken from wok and set aside. Add 1 additional tablespoon of oil to the wok, and stir fry the rest of the chicken.
Place all the chicken back in the wok. Stir the cooking sauce to re-dissolve cornstarch, and pour over chicken. Cook over medium high heat until sauce is thickened. If sauce seems too thick, add more water one tablespoon at a time to achieve desired consistency. Add peanuts, chiles and green onion pieces.
Serve with cooked rice.