The formation of new industries has recently been widely studied, but little research attention has been paid to the formation of new industries in old industrial districts, especially in transitional countries such as China. Based on fieldwork and rereading historical archives, this paper uses an example of Dalian tourism cluster to contribute to understanding the emergence of new economy in old industrial areas in a transitional country. The Section 2 of this paper will provide the theoretical framework from evolutionary economics for my empirical study. In Section 3, this paper will discuss the main characteristics of the decline of old industrial areas in Northeast China and the significances of developing new economy to revitalizing old industry areas. Section 4 will introduce the transitional history of Dalian economy from a high industrial region to a new economy city and also provides descriptive information about the development process of Dalian tourism industry. In Section 5, this paper will probe into the dynamics of the Dalian tourism cluster, from viewpoints of co-evolution and co-adaptation of firm, technology and institutions. Finally, we will give some policy suggestions of how to foster and promote new industries in old industrial areas, especially for transitional countries.