use XML::LibXML;
my $str = "<flower>r\x{16f}\x{17e}e</flower>"; 
my $doc = XML::LibXML->new->parse_string($str);
warn "Document ", $doc->toString, "\n";
warn "Encoding ", $doc->encoding, "\n";

##</code><code>##

Document <?xml version="1.0"?>
<flower>r&#x16F;&#x17E;e</flower> 

Encoding  

##</code><code>##

$doc->setEncoding('iso-8859-1')

##</code><code>##

use XML::LibXML;
my $str = '<?xml version="1.0" encoding="utf8"?>'
    . "<flower>r\x{16f}\x{17e}e</flower>";
my $doc = XML::LibXML->new->parse_string($str);
warn "Document ", $doc->toString, "\n";
warn "Encoding ", $doc->encoding, "\n\n";

$doc->setEncoding('iso-8859-1');
warn "Document ", $doc->toString, "\n";
warn "Encoding ", $doc->encoding, "\n";

##</code><code>##

Document <?xml version="1.0" encoding="utf8"?>
<flower>r&#313;&#379;&#313;že</flower>

Encoding utf8

Document <?xml version="1.0" encoding="iso-8859-1"?>
<flower>r&#367;&#382;e</flower>

Encoding iso-8859-1