Use 3 octal digits:
char problem = "abc\022e";
or split your string:
char problem = "abc\x12" "e";
Why these work:
Unlike hex escapes, standard defines 3 digits as maximum amount for octal escape.
126.96.36.199 Character constants
octal-escape-sequence: \ octal-digit \ octal-digit octal-digit \ octal-digit octal-digit octal-digit
hexadecimal-escape-sequence: \x hexadecimal-digit hexadecimal-escape-sequence hexadecimal-digit
String literal concatenation is defined as a later translation phase than literal escape character conversion.
188.8.131.52 Translation phases
Each source character set member and escape sequence in character constants and
string literals is converted to the corresponding member of the execution character
set; if there is no corresponding member, it is converted to an implementation-
defined member other than the null (wide) character. 8)
Adjacent string literal tokens are concatenated.