How to Make It
In a small skillet, mix the sugar with 1 tablespoon of the water and cook over high heat, stirring, until the sugar is dissolved. Cook without stirring until a deep amber caramel forms, 2 to 3 minutes. Remove from the heat and stir in the remaining 2 tablespoons of water. Transfer the caramel to a very small heatproof bowl.
Heat a wok over high heat. Add the canola oil and heat until just beginning to smoke. Add the onion and garlic and stir-fry until just softened, about 1 minute. Add the shrimp and stir-fry for 1 minute. Add the chiles, fish sauce, pepper, scallions and caramel and cook over moderate heat, stirring occasionally, until the shrimp are pink and curled, about 5 minutes. Add the diluted coconut milk and cook until slightly reduced, about 1 minute. Serve with rice.