Beijing is a city with a distinct literary culture. This comes from its role as a hub of education, but also of culture. Politics plays a role too, with government literary organizations contributing to the cultivation of literature (though not always good). An example of this would be Mo Yan, the recent nobel prize winner, who is based in Beijing and a leader in these organizations, though his work is often situated in his rural home province (and not Beijing). There are many bookstores in Beijing, ranging from large state run corporate stores to small independent and alternative bookshops.

Some of my favorite Beijing literary pieces, all in translation, are: 

Cao Xueqin author of the classic Dream of the Red Chamber lived in the Western Suburbs of the city. Some of Pu Songling's Strange Tales from the Chinese Studio are set in the capital, notably the story of the painted skin. 

Rickshaw Boy written by Lao She in the 1930s is a classic tale of class oppression of a lowly rickshaw driver in Republican Beijing, a city that is called "filthy, beautiful, decadent, bustling, chaotic, idle, lovable". Lao She is an interesting character, who wrote many interesting books, including one piece of early Chinese science fiction and social commentary about a man who goes to Mars and meets a country of cats. A western educated writer a teahouse in Beijing is named after him. He was struggled against by Red Guards in the 1960s and committed suicide. Learn more about him in this LARB article. 

Qian Zhongshu who wrote the famous Fortress Besieged was faculty in my department at Tsinghua for many years (we also share an ancestral hometown). 

Some more recent works that present the contemporary city include A Thousand Years of Good Prayer by Yiyun Li, Twenty Fragments of a Ravenous Youth by Xiaolu Guo, The Fat Years by Koonchung Chan, Beijing Doll by Chun Sue, and Beijing Coma by Ma Jian. Li's book of short stories contains different evocations of the city, as well as themes of migration, including one story collectively told from the perspective of a village where many Eunuch's were born, another telling of a gay man returning from overseas who can't bear to tell his mother his orientation, and of growing up within a government courtyard. Guo and Chun's books both present portraits of alienated young people. Ma's book looks at the events leading up to Tian'anmen. And Chan's book presents a dystopic and powerful Beijing as global hegemon, just slightly in the future.