in top spot by beating Germany's Angelique Kerber on Wednesday and then Li.
Azarenka now faces world number two Maria Sharapova in the semi-finals with the Russian, who beat Sam Stosur 6-0 6-3 on Friday, having already sealed first place in Group B before playing the Australian who could not reach the last four.
Poland's fourth seed Agnieszka Radwanska will play Serena Williams in the semis after overcoming seventh-seeded Italian Sara Errani 6-7 7-5 6-4 in the longest match ever played at a WTA Championships which lasted three hours, 29 minutes.
Azarenka becomes the 11th year-end number since the WTA began its rankings in 1975 and the fifth this century.
"It's kind of difficult to believe that a little girl from Belarus is on that list," the 23-year-old said. "But it's really an incredible achievement.
"When I started to play tennis I had this big picture in my head that I want to be there. Back then it was so far away. It was like pretty much touching the sky," added Azarenka.
The Belarussian broke Li when the eighth-ranked Chinese served for the first set at 5-4 and was forceful in the tiebreak, winning it 7-4.
Azarenka dominated the action off the ground for much of the second set and sealed the match after forcing Li into a forehand error in a hard hitting rally.
Brilliant response
Radwanska next faces 15-times grand slam champion Williams, who has yet to drop a set at the tournament.
Radwanska, who had lost to Sharapova in a three-hour and 12 minute marathon on Wednesday, had to pull out all the stops to get past the determined Errani.
The Italian won the first set 8-6 in the tiebreak after coming out ahead in a 34-ball rally and pumped her fist in delight while Radwanska angrily threw her racket to the ground.
Errani fought off four break points to hold for a 5-4 lead in the second but Radwanska responded brilliantly, winning 12 of the next 13 points to take the set 7-5.
"When I'd played for so long already I was thinking, just pretty much fight until the end," Radwanska said.
Errani troubled the Pole with a mix of heavy topspin and relentless retrieving but was unable to stay as mentally focused as the 2012 Wimbledon finalist, who nearly squandered a 3-0 lead in the third set but finally managed to defeat the Italian.
"She's a big fighter so she didn't give up," Radwanska said. "So I really had to play my best tennis until the end of the match."