For the chicken: Heat oil in a skillet over medium heat and preheat oven to 325ºF. While oil is heating, season chicken with salt and pepper.
Dip chicken in egg (beaten), then cornstarch, and fry in the oil until lightly golden brown, but not cooked through.
Remove chicken from pan and place on paper towel-lined plate briefly, cut the chicken breasts into 1-2 inch pieces, then place in a single layer in a baking dish.
For the sauce: In a medium bowl, whisk together the coconut milk, sugar, and vinegar. Pour the sauce over the chicken and bake for about an hour, stirring the chicken every 15 minutes. Once cooked through, let stand for at least 5 minutes to allow the sauce to thicken. Serve immediately over rice or however is desired.