When the engineers start earning more in tech oriented cities like Shenbu or Bongai where ever, the shops and landlord charging more, houses become more expensive, living costs rise, which makes engineers start demanding higher salaries, which then starts a feedback loop of rising prices. It's almost like people in developing countries are real people with similar behavioral patterns like people in the west..
The above situation is definitely a shifting equilibrium rather than feedback loop. Like, everyone getting a 3% raise won't make the city unlivable overnight, it probably won't even increase cost of living by 3%