This is constantly being misreported. No. They. Do. Not. Apple's data is kept on the device and so are the keys. If you enable that data to be put on the cloud (it's an opt-in) then they will also store the key, but otherwise they do not.
iMeasage, the one be thing that really matters in this case, encrypts it's chats "end to end" but using keys managed centrally by Apple, regardless of your iCloud sync situation, and manages them in a way that can't inspected by users. If a decrypted copy of all your encrypted chats is being sent to a government sink, there is no way for you to know or prevent it.
China cares about being able to intercept and decrypt your communication, they want to be able to identify and punish political threats. That's a service that Apple CAN provide to the Chinese government for all iPhone customers.
I'm always curious how can people get so confident about Apple's security practices, given that none of the parts are open source?
Is the trust solely reputation-based?