Collect all the ingredients.
Mix the water and cornstarch in a cup and set aside.
In a large glass bowl, combine 1 tablespoon of wine, 1 tablespoon of soy sauce, 1 tablespoon of sesame oil, and the cornstarch-water mixture. Add the chicken pieces and toss to coat evenly. Cover the bowl and refrigerate for about 30 minutes to marinate, allowing the flavors to infuse and tenderize the chicken.
In a medium bowl, combine the remaining 1 tablespoon of wine, soy sauce, sesame oil, and cornstarch-water mixture. Whisk in the chili paste, brown sugar, and vinegar until smooth. Add the water chestnuts, peanuts, green onions, and garlic, tossing everything together to coat evenly. This mixture creates a flavorful sauce with a balance of spice, sweetness, and crunch that will coat the chicken perfectly.
Transfer the water chestnut mixture to a medium skillet and heat it slowly over medium heat until it becomes aromatic. This allows the flavors to blend and intensify, setting the stage for a rich and fragrant base for the dish.
Meanwhile, transfer the marinated chicken into a large skillet and cook over medium-high heat, stirring occasionally, until the chicken is fully cooked and the juices run clear. This ensures the chicken is tender and thoroughly cooked, forming the base for the next step of the dish.
Add the water chestnut mixture to the sautéed chicken in the skillet. Adjust the heat and simmer, allowing the sauce to thicken and coat the chicken evenly. This step ensures the flavors meld together, creating a rich, savory sauce that enhances the dish.