Team India will field the largest number of players
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Li, one of seven Chinese players in the field, carded an eight-under-par 64, capping off his day by sinking a 12-foot par-saving putt at his final hole as the gallery roared in approval at Sheshan International.
He holds a one-shot advantage over Frenchman Victor Perez, while American defending champion Xander Schauffele, Australian Adam Scott, South Korean Im Sung-jae and Englishman Matthew Fitzpatrick are two behind in the World Golf Championships event.
Rory McIlroy recovered from a bogey at his first hole to shoot 67, while South African Louis Oosthuizen had a hole-in-one from 197 yards at the sixth on the way to a 68.
Li, twice a winner on the European Tour, has been ranked as high as 32nd in the world but is currently outside the top 50 after a disappointing year. He is coming off two straight missed cuts and was as surprised as anyone with Thursday's score.
"In my previous tournament I wasn't really playing that well (so) I never expected today, that I (would have) such a great round," the Tour's website quoted him as saying.
"Obviously it would be a great joy for Chinese golfers and Chinese golf fans to have a Chinese player winning a WGC-HSBC Champions here in China but for the next three days, anything could happen," said the 24-year-old.
"So I don't want to think too much about it. I just want to focus and concentrate on the upcoming three days."
Second-placed Perez has seen his stock rise recently thanks to a victory at the Alfred Dunhill Links Championship at St. Andrews four weeks ago.
Another shot behind, 2013 Masters champion Scott said the course was demanding, despite the glut of low scores.
"It plays tough if you're not in the fairway," said the Australian. "The rough is really nasty this year and it's firmer than I remember it."
Scott finished off his round with a bogey but it could have been worse after his approach shot from a fairway bunker drifted into a pond right of the green. After taking a penalty stroke, he hit a deft pitch that trickled down to tap-in distance.
One of the best drivers of the ball on Tour throughout his career, Scott has struggled with his swing of late but sounds happier now that he has switched to a new driver and widened his stance.
"I just haven't had any good feelings of where the golf club is in the downswing and that's never a nice thing," he said.
"I've been trying to trust it as best I can. I finally found it last week, though my scoring didn't indicate it. Everything's looking good."
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