(the fact) the Hong Kong is a small city

Is 'the fact' optional?

Well, to be honest, (the fact) that Hong Kong is a small city, is absolutely true.

Is 'the fact' optional?

It has a population of 7 million people but only 1,108 km2 (428 sq mi) of land, making it one of the most densely populated areas in the world.

http://en.wikipedia.org/wiki/Hong_Kong

Main Entry:
fact
Function:
noun
Etymology:
Latin factum, from neuter of factus, past participle of facere
Date:
15th century

1: a thing done: as aobsolete : feat b: crime <accessory after the fact> carchaic : action 2archaic : performance , doing3: the quality of being actual : actuality <a question of fact hinges on evidence>4 a: something that has actual existence <space exploration is now a fact> b: an actual occurrence <prove the fact of damage>5: a piece of information presented as having objective reality
" in fact
: in truth