Li, who won more than 50 grand prix and international titles including two world singles crowns in the 1980s, thinks her country needs to help out.
"As China is one of the strongest teams in the world, I think we have the responsibility to help the other less-developed countries to promote this sport," Li told Reuters on the sidelines of this week's session of the CPPCC, an advisory body to China's parliament.
One way that China could help is by letting leading players go abroad to play and coach at the end of their careers. Some hoping to do this, however, have been accused of "treachery".
Li thinks this unfair and once the national team has dispensed with a players' services, they should be free to go.
"I don't think it's very bad for China," said Li.
"In China because players don't have to pay for training when they're are young, the traditional concept is they should pay back the country ... so the public are unwilling to see their players go abroad no matter how old they are.
"Some players are not satisfied in retirement if they can't find a good job so they try to find a way to continue their career or to get a better life. It should be their choice."
Li is a council member of the Badminton World Federation (BWF), which this year launched the "Super Series" of 13 tournaments to try and better market the professional game.
She thinks it is a good idea but that there may be some teething problems, not least the possibility of overstretching the players.
"The players are playing more and more tournaments for prize money and train less and less, which is causing serious injuries and shortening their careers," she said. "But the organisers are always hoping the top players will be involved."
Twice an All England singles champion, Li believes the old tournament, taking place in Birmingham this week, will retain its prestige in the new era.
"Compared to my time 1980s, there are more and more tournaments around the world," she said. "But I still think the All England Open will remain at the top level because it can still attract the top players and sponsors."
The Beijing Olympics are just 18 months away and although Li was not able to take part herself -- badminton was not admitted to the Games until 1992 -- she is heavily involved in the preparations through her job at the organising committee.
She has concerns that the demand for home success, particularly in sports where China is strong like badminton, will place too heavy a burden on players.
"I know the public has very high expectations because the Olympic Games is in China for the first time, but for the athletes that sometimes brings very heavy stress," she said. "I personally always preferred playing abroad." (additional reporting by Liu Zhen)