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Add sugar, cayenne, minced garlic, soy sauce, salt, vinegar, and water to a saucepan and let it simmer (about 3-4 minutes), stirring occasionally till the sugar dissolves completely and the mixture reduces slightly.
Add the chilli paste and mix. Simmer again for 2-3 minutes.
Mix together cornflour and water in a bowl till no lumps exist and stir in this cornflour slurry into the sauce. Mix continuously till the sauce comes to a boil. Then reduce the heat and simmer till for 3-4 minutes till the sauce is thick, translucent and shiny. Turn off the flame.
Serve immediately or cool completely and then transfer to a clean jar. Refrigerate for up to 4 weeks.