According to the data of economic development in Beijing from the year 1995 to 2007, relevant economic indices are selected to analyze the economic development level of Beijing by the Principal Component Analysis Method. Result shows that the national economy maintains high, sustainable and stable development in the years 1995-2007. Both the primary and secondary industry output values have increased year by year; and the tertiary industry output value has grown rapidly. The annual gross domestic product, the output value of tertiary industry, and the total retail sales of consumer goods have the greatest impact on economic level of Beijing. Output value of secondary industry is the growth ability factor in economic environment. Empirical analysis shows that there are a number of problems in Beijing during the rapid development of economy, such as serious urban pollution, irrational industrial structure, lack of natural resources, rapid development of city scale, and lack of radiation on the surrounding area. Therefore, suggestions are put forward accordingly, including consolidating the functions of national political and cultural center, strengthening the infrastructure of Beijing, perfecting the social security system the, improving the industrial competitiveness, and seizing the technological frontier and high-end chain, so as to accelerate the economic development of Beijing, to improve the relevant systems and policies and to provide references for the policy making of government.