Preheat oven to 375°F.
To prepare meatballs, heat a skillet over medium-high heat, and sauté onion in
1 tablespoon cooking fat for 3–5 minutes, until translucent. Set aside and divide onions, half for the meatballs and half for the sauce.
In a small bowl, combine milk and breadcrumbs and stir to form a panade. Let sit 3–5 minutes to hydrate fully.
In a large bowl, combine onion, meat, half the chile paste, garlic, seasonings, olive oil, salt, egg, and panade. Mix with your hands until combined—do not overwork the mixture. Let sit for 10 minutes to allow the panade of milk and breadcrumbs to hydrate. With wet hands, roll meat mixture into lime-sized meatballs (or your preferred size).
In a large, shallow baking dish or sheet pan, place meatballs in a single layer, leaving a little space between them for even browning. Bake for 12 minutes, or until just set but not browned.