Prepare the Kung Pao sauce by stirring all the sauce ingredients together in a bowl until the sugar and cornstarch are dissolved. Set aside.
Heat a wok or large skillet over high heat until a drop of water sizzles and evaporates on contact. When hot enough, add bacon and cook until crisp on the outside and cooked through, about 3 to 4 minutes. Transfer cooked bacon to a paper towel-lined plate.
Drain all but 1 tablespoon of bacon grease from the wok or skillet. Add chilis and stir-fry for about 30 seconds, until the oil becomes fragrant and the chilis have begun to blacken.
Add scallion whites, garlic and ginger and stir-fry for about 30 seconds. Add the red bell pepper and stir-fry for another 30 seconds. Add bacon back to the wok or skillet. Pour in the Kung Pao sauce and mix to coat the other ingredients. Stir in peanuts then transfer to serving plate and garnish with scallion greens on top.
This dish is delicious served over a bowl of steaming rice.