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..

"It's almost like people in developing countries are real people with similar behavioral patterns like people in the west.."

Really? .. I thought they are supposed to do the work for us, yet allways stay below our level, because thats the way things are supposed to be.

You jest but that is the sincerest belief of typical Western managers

"Feedback loop?" Where did you learn economics?

I didnt....

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%