The 20-year-old Brit started the encounter well as she matched her Chinese opponent in the opening four games, resulting in the score being two apiece.
However, Li then broke Watson's serve, prompting a run of four successive games for the 30-year-old, who wrapped up the first set 6-2.
Watson refused to give her up her place in the tournament easily though and early in the second set she claimed a break of Li's service game to open up a 3-1 lead in her favour.
She failed the build upon that success though, as Na produced a string of flat forehand strokes to win the next four games to leave her on the cusp of victory.
Rain showers then delayed the match for around two hours, but when the duo returned to the court Na broke Watson's serve again to wrap up the match 6-2 6-3.
Na will now face Australia's Casey Dellacqua in the next round.