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In a medium bowl, combine the chicken, batter ingredients and 2 tablespoons water. Mix them by hand until the dry ingredients are evenly distributed.
In a separate medium bowl, sift together the breading ingredients.
Working with one piece of chicken at a time, drop each battered piece into the breading and lightly toss it to coat. (Do not press the breading onto the chicken.) Shake the excess breading off, then place the breaded chicken onto a wire rack-lined baking sheet, leaving space between each piece.
Heat the oil in a large wok or skillet to 325 degrees. Gently drop the chicken into the oil one piece at a time, spacing them out evenly. Let them fry, undisturbed, for 7 to 8 minutes, until the pieces are deeply golden brown, then remove them with a spider or slotted spoon and transfer to a paper towel-lined tray to drain.
Turn off the heat and carefully pour out oil into a heatproof container or pot to discard once it cools. Carefully scrape out any specks from the wok or pan with a paper towel held by tongs. Do not rinse the wok.
Heat the wok over medium-high. Add the onion, carrot, celery, water chestnuts, mushrooms and garlic. Stir-fry until the garlic and celery become aromatic, about 2 minutes.
Push the vegetables to one side of the wok. Add the sugar to the center of the wok and don’t stir it for several seconds, to encourage it to caramelize a little. Then add the soy sauce and oyster sauce, and stir until the sugar has dissolved into the liquids. Toss the vegetables into the sauce. Let the sauce come up to a full boil and stir occasionally for 2 minutes, allowing it to slightly reduce and thicken.
Stir in the fried chicken and cashews. Give the cornstarch-slurry a stir and add it to the sauce, stirring as it thickens. Remove from heat.
Stir in the sesame oil and MSG (if using), and transfer to a serving platter. Serve with rice, if desired.