A new government installed in that old Asian city (6)

I believe the answer is:

yangon

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'asian city' is the definition.
'Yangon' can be an answer for 'city' (Yangon is an example). I'm not sure about the 'asian' bit.

'a new government installed in that old' is the wordplay.
'new' becomes 'n' (common abbreviation eg NT for New Testament).
'government' becomes 'g' (abbreviation for government).
'installed in' means one lot of letters goes inside another.
'that old' becomes 'yon' ('yon' is an archaic word for 'that').
'a'+'n'+'g'='ang'
'ang' put into 'yon' is 'YANGON'.

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