Li trained to be an engineer in the Soviet Union and worked at an important national power company after returning to China.

After Deng Xiaoping became China's leader in the late 1970s, Li took a number of increasingly important and powerful political positions, eventually becoming premier in 1987.

Li advocated a largely conservative approach to Chinese economic reform, which placed him at odds with CCP General Secretary Zhao Ziyang, who fell out of favour in 1989.

After Zhao was removed from office, Li promoted a conservative socialist economic agenda but lost influence to incoming vice premier Zhu Rongji, and was unable to prevent the increasing market liberalization of the Chinese economy.

[2] He was the son of Li Shuoxun, one of the earliest CCP revolutionaries,[3] who was the political commissar of the Twentieth Division during the Nanchang uprising, and Zhao Juntao, also an early Communist operative.

According to his own recollection, in 1947, he journeyed through Shandong and North Korea, eventually ending up in Harbin where he began managing some work for a lard processing plant.

[3] Li was raised to the position of Premier thanks partially to the departure of Hu Yaobang, who was forced to resign as General Secretary after the Party blamed him for a series of student-led protests in 1987.

Despite these acute challenges, Li shifted his focus away from the day-to-day concerns of energy, communications, and raw materials allocation, and took a more active role in the ongoing intra-party debate on the pace of market reforms.

After Zhao became General Secretary, his proposals in May 1988 to expand free enterprise led to popular complaints (which some suggest were politically inspired) about inflation fears.

Public fears about the negative effects of market reforms gave conservatives (including Li Peng) the opening to call for greater centralization of economic controls and stricter prohibitions against Western influences, especially opposing further expansion of Zhao's more free enterprise-oriented approach.

The 1989 Tiananmen Square protests and massacre began with the mass mourning over the death of former General secretary Hu Yaobang, widely perceived to have been purged for his support of political liberalization.

[16] An editorial published in the People's Daily on 26 April and bearing the name of Deng Xiaoping, denounced the demonstrations as "premeditated and organized turmoil with anti-Party and anti-socialist motives".

[2] One of the protest's key leaders, Wu'erkaixi, during a hunger strike, publicly scolded Li on National Television, saying he was ignoring the needs of the people.

[18][citation needed] Among the other senior members of the central government, Li became the one who most strongly favored violence and known as the "Butcher of Beijing" for his role in the crackdown.

[19][20] After winning the support of most of his colleagues, apparently including Deng Xiaoping, Li officially declared martial law in Beijing on 20 May 1989 and promised "resolute and decisive measures to put an end to the turmoil".

Li later described the crackdown as a historic victory for communism,[3] and wrote that he feared the protests would be as potentially damaging to China as the Cultural Revolution had been.

By keeping Li at the upper levels of the Party, China's leaders communicated to the world that the country remained stable and united.

[23] In the immediate aftermath of the Tiananmen protests, Li took a leading role in a national austerity program, intended to slow economic growth and inflation and re-centralize the economy.

Li directed a tight monetary policy, implementing price controls on many commodities, supporting higher interest rates, and cutting off state loans to private and cooperative sectors in attempts to reduce inflation.

[24] After the fifth plenum of the 13th Central Committee in November 1989, Li established a State Council Production Commission to better coordinate the implementation of the plans.

[26]: 23  Li stated that future investors from Hong Kong, Macau, and Taiwan were welcomed and that China would provide preferential conditions for cooperation and improve the investment environment.

[26]: 23 In January 1992, at the same time as Deng Xiaoping's southern tour, Li attended the annual gathering of the World Economic Forum in Davos, Switzerland.

[28]: 52 Li suffered a heart attack in 1993 and began to lose influence within the Party to first-ranking vice premier Zhu Rongji, a strong advocate for economic liberalization.

Many economists and humanitarians suggested that those billions in capital might be better invested in helping the Chinese population deal with economic hardships and improvement in China's education, health services, and legal system.

[23] At the Waldorf-Astoria Hotel, a licensed private investigator served him with a legal summons in connection with human rights litigation involving the Tiananmen square crackdown.

In addition, perhaps more than any other leader, Li's public image had become inextricably associated with memory of the 1989 Tiananmen crackdown, and as a result he continued to be a widely despised figure among a substantial segment of the Chinese population well into the 21st century.

State-run Chinese media have publicly questioned whether it is in China's long-term interest to preserve the "new class of monopoly state capitalists" that Li's family represents.