Li, who won the trophy at the Canadian Open twice in 2015 and 2022, is currently ranked 13th in the world. She also earned many gold medals in the women's singles at the Pan American Games.
Linh, the world's 29th player, excellently won a victory with a score of 21-11 in the first set and 21-17 in the second.
Previously, Linh also defeated Li 2-1 at the 2018 China Open Badminton Tournament.
On Sunday, Linh will play world number 1 badminton player Akane Yamaguchi of Japan in the quarterfinals of the tournament.
The 2023 Canada Open badminton tournament takes place in Calgary, Canada, from July 4 to July 9 with the total cash prize pool worth $420,000. The tournament belongs to the World Tour Super 500 of the Badminton World Federation (BWF).