The 31-year-old former French Open champion and current world number three was pushed to three sets by Romanian Monica Niculescu, who had won their only previous match, played in Beijing during 2011.
Li edged the decider to earn a 7-5 4-6 6-4 victory over 59th-ranked Niculescu, setting up a semi-final against Germany's Annika Beck.
In the final match of the day, Beck was in trouble early on against Austrian Patricia Mayr-Achleitner before scrapping for a 3-6 6-3 6-1 victory.
There could be an all-Chinese final on Saturday, with fifth seed Shuai Peng also through to the semi-finals.
She beat Slovakian Jana Cepelova 6-3 6-2, and will tackle American Vania King who ousted Czech player Barbora Zahlavova-Strycova by a 6-2 6-4 margin.