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Mining camps on the northern coast of Dalian Bay became the small town of Qingniwa or Qingniwaqiao, near what became downtown Dalian. Port Arthur at the peninsula's tip took its English name from Royal Navy Lieutenant William C. Although China heavily fortified the area, in which it allowed trade with foreigners, Japan swiftly overcame those defenses in the First Sino-Japanese War, committing the Port Arthur massacre during the war in November 1894.

In April 1895, China conceded defeat in the First Sino-Japanese War, ceding Liaodong Peninsula, Taiwan and Penghu, and making many other concessions in the Treaty of Shimonoseki.

In the early Tang Dynasty (618–907), the Dalian region was part of Andong Prefecture in Jili state; during the Liao Dynasty (916–1125), it was part of Dong Jing Tong Liaoyang county.

Dalian was named Sanshan in the period of Wei Jin (220–420), San Shanpu in the Tang Dynasty (618–907), Sanshan Seaport in the Ming Dynasty (1368–1644), and Qingniwakou during the Qing Dynasty (1644–1911).

Following the Russian defeat in the Russo-Japanese war of 1904-5, the city was transferred to Japanese control and renamed Dairen.

Located at the southern tip of the Liaodong Peninsula, the main part of the city is on its own sub-peninsula, with the port to the north of the town centre and natural coastline dotted with beaches to the east and south. Jinzhouqu District, Lvshunkou District, Kaifaqu District and Changhaixian District, a small group of islands east of the Liaodong Peninsula, represent the other half of Dalian's 8 districts.

Wafangdian, Pulandian, and Zhuanghe represent the 3 sub-cities within the municipal territory of Dalian.

Dalian is less reliant on heavy industry than its Northeast counterparts, and what heavy industry there is is mostly located in the development zone far outside the city center.

This, combined with the city's many parks and green hills, wide thoroughfares and army of street cleaners, make Dalian a more pleasant city to visit and live in than most Chinese cities of comparable size.