Clean the fresh squid thoroughly. Score the inside of the squid body in a criss-cross pattern without cutting all the way through. Cut the body into bite-sized pieces and separate the tentacles. Drain excess water.
In a bowl, combine the squid with Shaoxing wine, light soy sauce, white pepper, and sesame oil. Mix well and let it marinate for 15 minutes.
In a separate bowl, beat the egg. In another bowl, mix the all-purpose flour and potato starch.
Dip each piece of marinated squid into the beaten egg, then dredge it thoroughly in the flour and potato starch mixture, ensuring it's fully coated. Shake off any excess.
In a small bowl, combine salt, white pepper, five-spice powder, and sugar. Mix well.
Chop the spring onion, red chili, and mince the garlic.
Heat cooking oil in a wok or deep pot to 170-180°C (340-355°F). Deep fry the coated squid in batches until golden brown and crispy, about 2-3 minutes per batch. Remove with a slotted spoon and drain on paper towels.
Pour out most of the oil from the wok, leaving about 1 tbsp. Add minced garlic and chopped red chili (if using) and stir-fry until fragrant. Add the deep-fried squid and chopped spring onion. Sprinkle the salt and pepper mix over the squid. Toss quickly to coat evenly.
Transfer the Salt and Pepper Squid to a serving plate and serve immediately.
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