There are no hard and fast lines for each system but more a matter of emphasis. Each system can turn out a beautiful dressage horse, light on the aids yet forward, but the German system seems to produce a little more thrusting power with a heavier contact and the French system seems to produce more lightness and effortless collection. Some of the best modern trainers(Carl Hester I'm talking about you!) have a synthesis of both systems that produces some fabulous horses. Carl was recently quoted in an article espousing balance BEFORE power that seems to sum up the best in competetive dressage right now.
So what does Carl Hester have to do with me, you might rightly ask. Well, as I have gotten further down the rabbit hole of rider biomechanics I have realized that the French system might be a better fit for my hot, likes to sit on his haunches, little sport pony. Using a synthesis might work great on the super fancy warmbloods with huge gaits that Carl rides, but when forward to the contact is used with Jet, even with connecting half-halts, Jet still tends to like to rush and be out of balance. Obviously rider biomechanics matter, but what if by using the German system, which is the one I am familiar with, I have been making things almost impossible for him?
Heather Moffett of Enlightened Equitation talks about this a lot in some of her YouTube videos and I really love how some of her very ordinary horses go. So light and effortless. Soft but carrying themselves. Maybe lacking the huge extensions of the big time warmbloods trained for competition but the horses look so much happier than a lot of the competition horses I see. The balance and collection are correct and the extensions not bad for ordinary horses without huge gaits before any training starts. Something to think about.