The "Hero" actor was holidaying in the Maldives with his family, when the tsunami hit the coastline, reported imdb.com.
At a Hong Kong fundraiser, Li told the audience, "The waves came really quickly and formed swirls. I carried my daughters and pulled my maid and ran. I'd only walked three steps when I realized that the water had already come up to my waist.
"When I looked back, everything I saw minutes ago was gone. Everything was surrounded by the ocean. The houses collapsed. I continued to run but the water was already up to my mouth."
Li and his family managed to find lifejackets in their hotel as they waited for a second round of bigger waves to hit the island.
Li has donated $158,000 to the tsunami relief fund. He regards the tragic event as a defining moment in his life.
"Some things I dared not do in the past, I am ready to do them now," he said.