They are both correct, but not interchangeable. In the first sentence 'to' is comparing the location of the two cities. It wouldn't make sense to say 'the city is in the north of Beijing', because it sounds like the city is inside Beijing. However this works when you say a city is 'in' the north of a country, because the entire city is located within the country. The second example is not so clear cut. One does not say the city is 'to the north of Spain' because to the north of Spain is France, or the ocean. If you used this construction you would be understood, but 'in the north of Spain' is much better.