Lair accommodating son taken in Red China (7)
I believe the answer is:
dresden
'china' is the definition.
(a type of porcelain)
'lair accommodating son taken in red' is the wordplay.
'lair' becomes 'den' (synonyms).
'accommodating' means one lot of letters goes inside another.
'son' becomes 's' (genealogical abbreviation for son).
'taken in' means one lot of letters goes inside another.
's' going inside 'red' is 'resd'.
'den' going around 'resd' is 'DRESDEN'.
(Other definitions for dresden that I've seen before include "Fine china named after German city" , "Red Ned's in the German city" , "Famous china made at Meissen" , "that was notoriously fired" , "'German city, almost totally destroyed by British air raids in 1945 (7)'" .)