Whisk flour, ½ cup cornstarch, salt, and white pepper together in a large bowl. Add egg, water, and 1 ½ tablespoons canola oil and stir to combine (mixture will be like a sticky batter). Add chicken pieces to batter and toss well to coat. Let chicken stand in refrigerator while oil heats.
Pour peanut oil into a deep saucepan filled about 2 inches deep. Heat oil to 375 degrees C (190 degrees F).
Meanwhile, to make the sauce: Heat remaining ½ tablespoon canola oil and 2 teaspoons sesame oil in a large skillet over medium-high heat. Add crushed red pepper, ginger, and garlic; cook, stirring constantly, until fragrant, about 30 seconds. Stir in brown sugar, orange juice, vinegar, and soy sauce; bring mixture to a boil, stirring often.
Combine 3 tablespoons cold water with 2 tablespoons cornstarch in a small bowl and stir until cornstarch is dissolved. Pour mixture into saucepan and stir to combine. Bring mixture to a boil and reduce to simmer, stirring constantly until sauce thickens. Turn heat off and keep warm while chicken is cooking.
Working in batches, add coated chicken pieces carefully to the hot oil. Oil temperature will reduce when food is added. Cook chicken at 350 degrees F (175 degrees C), stirring occasionally, until golden brown and crispy, 5 to 6 minutes. Remove chicken with a slotted spoon and drain on a wire rack set over paper towels. Bring oil temperature back up to 365 to 375 degrees F (185 to 190 degrees C) and repeat process with remaining chicken.
Return sauce mixture to medium heat, add more water if necessary if sauce thickens too much. Once hot, add in cooked chicken pieces and toss well to coat. Stir in remaining 1 teaspoon sesame oil and orange zest and serve over hot cooked rice. Garnish with green onions and sesame seeds if desired.
