Your question presumes a Western, liberal paradigm of how govts should function. Most of the answer rests in different levels of institutional mistrust. Authori

Your question presumes a Western, liberal paradigm of how govts should function. Most of the answer rests in different levels of institutional mistrust. Authoritarian govts are necessarily always operating under a siege mentality, so they must check on each other. Noting that, at the highest level the Chinese govt is wholly controlled by the Chinese Communists and the Communists correctly note the existential threat their bureaucrats pose. And it cascades down from there. There’s an illustrative proverb that goes “Heaven is high and the emperor is far away.” This idea justifies doing something you know is wrong, but is unlikely to be punished. So to answer the question, the govt is not using key escrow for its own internal communications. Because it isn’t a monolith, and it’s not internal. The different fiefs need to be watched as much as anyone else.